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Atlanta Partners provides management consulting services to government and corporate clients. Atlanta has two support departments-administrative services (AS) and information systems (IS)-and two operating departments-government
Atlanta Partners provides management consulting services to government and corporate clients. Atlanta 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 2017, Atlanta's cost records indicate the following: (Click the icon to view the cost records.) Read the requirements. Requirement 1a. Allocate the two support departments' costs to the two operating departments using the direct method. (Do not round intermediary calculations and round your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.) Direct Method Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs Allocation of IS costs Total budgeted overhead of operating departments Support Departments Operating Departments AS IS GOVT CORP Total Data table SUPPORT AS IS Budgeted overhead costs before any interdepartment cost allocations $ Support work supplied by AS (budgeted head count) Support work supplied by IS (budgeted computer time) OPERATING GOVT CORP Total 330,000 $ 2,400,000 $ 8,650,000 $ 12,450,000 $ 23,830,000 0 25% 45% 30% 100% 10% 0 27% 63% 100% Print Done Requirements per ces tm 1. Allocate the two support departments' costs to the two operating departments using the following methods: a. Direct method b. c. Step-down method (Allocate AS first) 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? Print Done
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