Refer to the data given in Exercise 14-20.

In Exercise 14-20

Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support divisions-administrative services (AS) and information systems (IS) and two operating divisions-government consulting (Govt.) and corporate consulting (Corp.). For the first quarter of 2015, Phoenix's cost records indicate the following:

Required
1. Allocate the two support divisions' costs to the two operating divisions using the reciprocal method.
2. Compare and explain differences in requirement 1 with those in requirement 1 of Exercise 14-20. Which method do you prefer? Why?

Support Operating . AS IS Corp. Total Budgeted overhead costs before any Support work supplied by AS Support work supplied by IS interdepartment cost allocations (budgeted head count) (budgeted computer time) S600,000 $2,400,000 S8,756,000 $12,452,000 $24,208,000 100% 100% 25% 40% 35% 10% 30% 60%