PROBLEM 6 [11 Marks] Q6V2 (Please write this version number in your answers) Murray River Cruises Company has two service departments: Maintenance and Personnel, and two production departments: A and B. The budgeted costs of all departments for the coming year are: Support Departments Production Departments Maintenance Personnel Department A Department B Costs $100,000 $90,000 $125,000 $150,000 Maintenance Department's costs are allocated based on budgeted maintenance-hours. Personnel Department's costs are allocated based on the number of employees. An analysis of the work done by Maintenance and Personnel departments in a typical period follows: Used by Supplied by Maintenance Personnel B Budgeted maintenance hours 400 800 Number of employees 100 600 800 300 Required: [show all workings not formulas, and, where necessary, round to 2 decimal places] a. What are the allocated costs of maintenance and personnel departments to departments A and B, using the direct method? 3 Marks] b. What are the allocated costs of maintenance and personnel departments to departments A and B, using the reciprocal allocation method? [3 Marks] c. An outside company has offered to provide all the services of the Maintenance Department. The cost of this service will be $105 per maintenance hour. Should Murray River Cruises Company accept this offer? Show your calculations of relevant costs. [3 Marks] d. In addition to relevance costs, please list four factors that Murray River Cruises Company should consider in deciding to accept this offer. [2 marks]