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Houstin Partners provides management consulting services to government and corporate clients. Houstin has two support departmentsadministrative services (AS) and information systems (IS)and two operating departmentsgovernment
Houstin Partners provides management consulting services to government and corporate clients. Houstin has two support departmentsadministrative services (AS) and information systems (IS)and two operating departmentsgovernment consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2017, Houstin's cost records indicate the following: E: (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.) Support Departments Operating Departments Requirements Direct Method AS IS GOVT CORP Total Budgeted overhead costs 1. Allocate the two support departments' costs to the two operating departments before interdepartment cost allocations using the following methods: Allocation of AS costs Direct method b. Step-down method (Allocate AS first) Allocation of IS costs c. Step-down method (Allocate IS first) Total budgeted overhead of operating departments 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 Data table support departments when using the step-down method? a SUPPORT OPERATING Print Done AS IS GOVT CORP Total $ 300,000 $ 2,400,000 $ 8,700,000 $ 12,425,000 $ 23,825,000 Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS (budgeted head count) Support work supplied by IS (budgeted computer time) 0 25% 45% 30% 100% Clear all Check answer 10% 0 36% 54% 100%
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