Question 1(25 Marks) Part A [15 marks] Ready Homes Inc. manufactures and assembles prefabricated Steel and Concrete Structures which are used for the construction of starter Homes. There are three (3) support departments and two (2) production departments. The budgeted costs and the normal activity levels for each department are given below. Overhead costs Square feet Number of employees Support Departments Design and Fabrication Installation Personnel & assembly $300,000 200 4 $3,200,000 $4,800,000 12,000 40 Production Departments Steel Concrete 18,000 32 160,000 50 172,000 60 5,400,000 $8,200,000 400,000 600,000 Material Cost Total production in square meters Direct labor cost $200,000 $1,350,000 $1,420,000 $700,000 $1,262,500 The allocation bases are as follows: Design - Number of Employees; for Fabrication - Square feet and for Installation - Material costs. The production department allocates overhear cost to each case based on the budgeted cases produced for each product. Required 1). Using the Step-down method, allocate the Design and personnel cost. (3Marks) 2). Set up the equations that should be solved if the reciprocal method is used to allocate the two-remaining support department cost to the production departments. (3 Marks) 3). Determine the total cost per square meter using the reciprocal method of support cost allocation. (9Marks)