Boston Partners provides management consulting services to government and corporate clients. Boston 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, Boston's cost records indicate the following: (Click the icon to view the cost records.) 88 The two support departments' costs have been allocated to the two operating departments using the direct method and the step-down method (AS department first) and the step-down method (IS department first). The results of the allocations are as follows: (Click the icon to view the direct method.) (Click the icon to view the step-down method (AS first).) (Click the icon to view the step-down method (IS first)) (Click the icon to view a summary of the Read the requirements BE Requirement 1a. Allocate the two support departments' costs to the two operating departments using the reciprocal method. First, determine the linear equations for each support department AS- $660,000 + 0.10 IS $3,900,000+ IS 0.20 AS Now allocate the support departments' costs (AS and IS department costs that you determined in the prior step) to the two operating departments using the reciprocal method. (Robnd decimal calculations Data table - x B D E F 1 SUPPORT OPERATING AS IS GOVT CORP Total $ 660.000 S 3,900,000 $ 8,650,000 S 12,470,000 $ 25,680,000 2 Budgeted overhead costs before any 3 interdepartment cost allocations Support work supplied by AS 4. (budgeted head count) Support work supplied by IS 5 (budgeted computer time) 0 20% 48% 32% 100% 10% ol 27% 63% 100% Print Done leimal calculation unt and inimation systems (IS) and two operating method and the step-down method (AS department first) and the step-down meth Direct method Support Departments Operating Departments Direct Method AS IS GOVT CORP Total $ Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs Allocation of IS costs Total budgeted overhead of operating departments 660,000 $3,900,000 $ 8,650,000 $ 12,470,000 $ 25,680,000 (660,000) 396,000 264,000 (3.900.000) 1,170,000 2,730,000 05 0 S 10,216,000 5 15,464,000 $ 25,680,000 $ Print Done lation Sonnenartments Onerating Departments Step-down method (AS first) Support Departments Operating Departments GOVT CORP AS IS Total Step-down Method Budgeted overhead costs before interdepartment cost allocations $ Allocation of AS costs $ 660,000 $3,900,000 $8,650,000 $ 12,470,000 $ 25,680,000 (660,000) 132,000 316,800 211,200 0 4,032,000 (4,032,000) 1.209,600 2,822,400 $ 0 $ 10,176,400 $ 15,503,600 $ 25,680,000 Allocation of IS costs Total budgeted overhead of operating departments Print Done lation thoc ep-down method (IS first) Support Departments Operating Departments AS IS GOVT CORP Total Step-down Method Budgeted overhead costs before interdepartment cost allocations Allocation of Is costs S $ 660,000 $3,900,000 S 8,650,000 $ 12,470,000 $ 25,680,000 390,000 (3.900,000) 1,053,000 2,457.000 0 1,050,000 (1,050,000) 630,000 420,000 0 $ 10,333,000 $ 15,347.000 $ 25,680,000 Allocation of AS costs Total budgeted overhead of operating departments $ Print Done lations Reference GOVT CORP Direct method S 1,566,000 $ 1,526,400 Step-down (AS first) Step-down (IS first) 2,994,000 3,033,600 2.877,000 1,683,000 Print Done malbad (AS Requirements X (IS e me 1. Allocate the two support departments' costs to the two operating departments using the reciprocal method. Use (a) linear equation and (b) repeated iterations. Compare and explain differences in requirement 1 with those of the direct method and the step down method. Which method do you prefer? Why? 2. Print Done AS IS GOVT CORP Total Reciprocal Method Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs 660000 8650000 12470000 25680000 -1071429 411429 3900000 214286 -4114286 Alocation of IS costs Total budgeted overhead of operating departments 0 0 25680000 Help me solve this Etext pages Get more help Clear all Check