ABBOTT INC Support Departments Operating Departments Engineerin Information Technology Eastern Department Western Department Total Budgeted Overhead Costs Before Any Interdepartment Cost Allocations $ 300,000 $ 250,000 $ 650,000 $ 920,000 $2,120,000 Support Work Furnished By Engineering Budgeted Engineer Salaries Percentage $ $ 50,000 $ 60,000 30% 90,000 45% $ 200,000 100% 25% Support Work Furnished By Information Technology Budgeted IT Service Hours Percentage 450 15% 1500 50% 1050 35% 3000 100% Part 1: Use the Direct Method to Allocate Support Costs ABBOTT INC Support Departments Informatio Engineerin Technology Operating Departments Eastern Western Departmen Departmen t t n Budgeted Overhead Costs Before Interdepartment Cost Allocations Support Work Furnished By Engineering Support Work Furnished By Info. Tech. Total Departmental Costs Part 2: Use the Step-Down Method to Allocate Support Costs (Allocate Engineering 1st) ABBOTT INC Support Departments Informatio Engineerin Technology Operating Departments Eastern Western Departmen Departmen t t n Budgeted Overhead Costs Before Interdepartment Cost Allocations Support Work Furnished By Engineering Support Work Furnished By Info. Tech. Total Departmental Costs Part 2: Use the Step-Down Method to Allocate Support Costs (Allocate Information Technology 1st) ABBOTT INC Support Departments Informatio Engineerin n Technology Operating Departments Eastern Western Departmen Departmen t t Budgeted Overhead Costs Before Interdepartment Cost Allocations Support Work Furnished By Info. Tech. Support Work Furnished By Engineering Total Departmental Costs