$15-20$ Phoenix Partners provides management consulting services to government and corporate Required

Allocate the two support departments' costs to the two operating departments using the

following methods:

a$.$ Direct method

b$.$ Step$-$down method $($allocate AS first$)$

c$.$ Step$-$down method $($allocate IS first$)$

Compare and explain differences in the support department costs allocated to each

operating department. $15-20(30$ min.$)$ Support$-$department cost allocation; direct and step$-$down methods.

clients. Phoenix has two support departments$$administrative services $($AS$)$ and information

systems $($IS$)$and two operating departments$$government consulting $($GOVT$)$ and corporate

consulting $($CORP$).$ For the first quarter of the year, Phoenix's cost records indicate the

following: