Manhattan Partners provides management consulting services to government and corporate clients. Concord has two support departments---administrative services (AS) and information system (IS)---and two operating departments---government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2017, Manhattan's cost records indicate the following:

	SUPPORT			OPERATING
	AS	IS		GOVT	CORP	Total
Budgeted overhead costs before any
interdepartment cost allocations	$390,000	$3,600,000		$8,750,000	$12,540,000	$25,280,000
Support work supplied by AS
(budgeted head count)	---	20%		48%	32%	100%
Support work supplied by IS
(budgeted computer time)	10%	---		36%	54%	100%

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:

direct method

	Support Departments		Operating Departments
Direct Method	AS	IS	GOVT	CORP	Total
Budgeted overhead costs
before interdepartment cost allocations	$390,000	$3,600,000	$8,750,000	$12,540,000	$25,280,000
Allocation of AS costs	(390,000)		234,000	156,000
Allocation of IS costs		(3,600,000)	1,440,000	2,160,000
Total budgeted overhead of operating departments	$0	$0	$10,424,000	$14,856,000	$25,280,000

step down method (AS) first

	Support Departments		Operating Departments
Step-down Method	AS	IS	GOVT	CORP	Total
Budgeted overhead costs
before interdepartment cost allocations	$390,000	$3,600,000	$8,750,000	$12,540,000	$25,280,000
Allocation of AS costs	(390,000)	78,000	187,200	124,800
	$0	3,678,000
Allocation of IS costs		(3,678,000)	1,471,200	2,206,800
Total budgeted overhead of operating departments		$0	$10,408,400	$14,871,600	$25,280,000

step down method (IS) first

	Support Departments		Operating Departments
Step-down Method	AS	IS	GOVT	CORP	Total
Budgeted overhead costs
before interdepartment cost allocations	$390,000	$3,600,000	$8,750,000	$12,540,000	$25,280,000
Allocation of IS costs	360,000	(3,600,000)	1,296,000	1,944,000
	$750,000	$0
Allocation of AS costs	(750,000)		450,000	300,000
Total budgeted overhead of operating departments	$0		$10,496,000	$14,784,000	$25,280,000

summary of the three methods

	GOVT	CORP
Direct method	$1,674,000	$2,316,000
Step-down (AS first)	1,658,400	2,331,600
Step-down (IS first)	1,746,000	2,244,000

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.

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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. (Round decimal calculations to three decimal places, .XXX, and 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.)

Requirement 1b. Allocate the two support departments' costs to the two operating departments using the reciprocal method. Use repeated iterations. (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.)