Management at Consulting Inc. has decided to allocate costs of the company's two support departments (administration and information technology) to the two revenue-generating consulting departments (financial consulting and operations consulting). Administration costs are to be allocated on the basis of dollars of assets employed; Information technology (IT) costs are to be allocated on the basis of number of employees. The following costs and allocation bases are available:

a. Using the direct method, allocate the support department costs to the revenue-generating departments.

b. Using your answer to (a), what are the total costs of the revenue-generating departments after the allocations?

c. Assuming that the benefits-provided ranking is the order shown in the table, use the step method to allocate the support department costs to the revenue-generating departments.

d. Using your answer to (c), what are the total costs of the revenue-generating departments after the allocations?

e. Using the algebraic method, allocate the support department costs to the revenue-generating departments.

f. Using your answer to (c), what are the total costs of the revenue-generating departments after the allocations?

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Department Administration. Information technology. Financial consulting Operations consulting... Totals Direct Costs Number of Employees Assets Employed $ 547,050 $ 270,970 204,190 8 344,890 6 870,565 20 658,500 10 $2,421,005 44 $1,818,610 968,050 375,400