16-19 Support-department cost allocation; direct and step-down methods. Phoenix Partners provides management consulting services to government and corporate 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 2020, Phoenix's cost records indicate the following: G Formulas Data B SUPPORT AS IS Review View D E F OPERATING GOVT CORP Total 50 Home Insert Page Layout A 1 2 3 Budgeted overhead costs before any 4 interdepartment cost allocations Support work supplied by AS 5 (budgeted head count) Support work supplied by IS 6 (budgeted computer time) $600,000 $2,400,000 $8,756,000 $12,452,000 $24,208,000 25% 40% 35% 100% 10% 30% 60% 100% Required 1. 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) 2. Compare and explain differences in the support-department costs allocated to each operating department. 3. What approaches might be used to decide the sequence in which to allocate support departments when using the step-down method