Budgeted cost before any interdepartmental cost allocations Number of employees Processing hours Auditor hours Consultant hours Supporting Departments Information Operating Departments Consulting Human Resources Assurance Technology Services $ 800,000 $ 1,600,000 $ 15,625,000 Services $ 8,576,000 22 96 49 690 2,540 1,750 69,120 35,280 Required: 1. 2. 3. KMPG partners agree to allocate supporting departments costs based on a ranking of the percentage of their total services provided to other support department. The cost of the higher-ranking department would be allocated first. Allocate the supporting departments' costs to the operating departments using the step-down method. (11 points) Client A hires KMPG to audit its financial report. In addition, the corporate secretary department of Client A hires consultants from KMPG to produce a sustainability report. KMPG spent 2,400 auditor hours and 1,008 consultant hours for Client A. Calculate the total cost for Client A. (5 points) One of the KMPG partners argues that the supporting departments have reciprocal relationship. If the supporting departments costs are to be allocated using reciprocal method, what is the linear equation applicable for each department? (4 points)