Phoenix Partners provides management consulting services to government and corporate clients. Phoenix 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 2020, Phoenix's cost records indicate the following:

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:

Requirements

1.	Allocate the two support departments' costs to the two operating departments using the reciprocal method. Use (a) linear equation and (b) repeated iterations.
2.	Compare and explain differences in requirement 1 with those of the direct method and the step down method. Which method do you prefer? Why?

Direct method Step-down method (AS first) Step-down method (IS first) Reference Direct method Step-down method (AS first) Step-down method (IS first) Reference