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Apex provides management consulting services to government and corporate clients. Apex has two support departments-administrative services (AS) and information systems (IS) and two operating departments-government

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Apex provides management consulting services to government and corporate clients. Apex has two support departments-administrative services (AS) and information systems (IS) and two operating departments-government consulting (GOVT) and corporate consulting (CORP). For the second quarter of 2014, Apex's cost records indicate the following: Particulars Total Support AS Support IS Operating Gaxt Operating Corp $500,000 $200,000 $200,000 1,400,000 Interdepartmental cost $500,000 allocations Support work supplied by AS (budgeted head count) 25% 50% 25% 100% 20% 30% 50 % 100 % Support work supplied by IS (budgeted head count) Required: 1. Allocate the two support departments' costs to the two operating departments using the following methods: a. Direct method (25marks) b. Step-down method (allocate AS first) (25marks) c. Step-down method (allocate IS first) (25marks) 2. Allocate the two support departments' costs to the two operating departments using the reciprocal method. Use (a) linear equations. (25marks)

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