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After starting his first full-time position for a private company, Jason was anxious to go above and beyond the expectations of his supervisor. So, when
After starting his first full-time position for a private company, Jason was anxious to go above and beyond the expectations of his supervisor. So, when Sarah asked him to complete the support department cost allocations for all departments using the same method as they used last year, he thought, "Here's my chance!" In addition to the step method that this company was currently using, Jason remembered learning two other methods for allocating these costs-the direct method and the reciprocal method. The two operating segments of this company reflect their locations-Suburban and Downtown. The two support departments are Administrative Services and Maintenance Services. Their costs have been allocated by administrative hours and maintenance hours, respectively. Here are the relevant costs and usages for all four of these departments. (a) Rank the two support departments based on their original cost (as was done last year), and allocate the support department costs using the step method
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