Cooper Ltd. has 2 operating divisions: domestic sales and international sales. They also have 2 support divisions: accounting support and human resources support. For the past year, Coopers cost records show the following information:

	Support Divisions		Operating Divisions
	Accountg Support	Human Resources Support	Domestic Sales	Inter-national Sales	Total
Budgeted costs incurred before any interdivision cost allocations	$500,000	$600,000	$8,400,000	$7,500,000	$ 17,000,000
Support work supplied by Accounting (based on # of employees)		20%	40%	40%	100%
Support work supplied by Human Resources (based on # of staffing actions)	10%		60%	30%	100%

Required:

1. Allocate the 2 support divisions costs to the operating divisions using the Direct Method.
2. Allocate the 2 support divisions costs to the operating divisions using the Reciprocal Method.
3. Allocate the 2 support divisions costs to the operating divisions using the Step Down Method Allocate Accounting Support first.
4. What method do you recommend and why?
5. Cooper Ltd. would like to share the services of a consultant with another company, Hofstadter Inc. The consultant will work a total of 1,000 hours for both companies: 700 for Cooper and 300 hours for Hofstadter Inc. The total cost of the contract will be $368,000. If Cooper were to contract directly with the consultant for 700 hours, the cost would have been $350,000. If Hofstadter were to contract directly with the consultant, the contract would have cost them $ 150,000. How should the companies divide up the cost of the consultant?