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Hudson Partners provides management consulting services to government and corporate clients. Hudson has two support departments-administrative services (AS) and information systems (IS)-and two operating departments-government
Hudson Partners provides management consulting services to government and corporate clients. Hudson 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, Hudson's cost records indicate the following: (Click the icon to view the cost records.) Read the requirements. 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) Step-down metrou OPERATING GOVT CORP Total 630,000 $ 1,800,000 $ 7,500,000 $ 12,450,000 $ 22,380,000 0 25% 45% 30% 100% 10% 0 27% 63% 100% Print Done GOVT CORT Total - Requirements 1. Allocate the two support departments' costs to the two operating departments using the following methods: a. Direct method b. Step-down method (Allocate AS first) C. 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 nus se p
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