Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support The two support departments' costs have been allocated to the two operating departments using the direct method and the step-down departmentsadministrative services (AS) and information systems (IS)and two operating departmentsgovernment consulting (GOVT) method (AS department first) and the step-down method (IS department first). The results of the allocations are as follows: and corporate consulting (CORP). For the first quarter of 2017, Phoenix's cost records indicate the following: (Click the icon to view the direct method.) (Click the icon to view the cost records.) (Click the icon to view the step-down method (AS first).) Read the requirements. (Click the icon to view the step-down method (IS first).) (Click the icon to view a summary of the three methods.) 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. Requirements AS= + IS 1. Allocate the two support departments' costs to the two operating departments using the reciprocal method. Use (a) linear equation and (b) repeated iterations. Compare and explain differences in requirement 1 with those of the direct method and the step down method. Which method do you prefer? Why? 2. Print Done E15-20 (book/static) i Direct method Phoenix Partners provides management Consulting services to government and corporate clients. Phoenix has two support departments administrative services AS, and information systems (13) and two operating departments-government consulting (covi and corporate consulting (CORP). For the first quarter of 2017, Phoenix's cost records indicate the following: (Click the icon to view the cost records 1 Data Table Support Departments Operating Departments AS IS GOVT CORP Total Direct Method Budgeted overhead costs before interdepartment cost allocations Allocalion al AS Allocation of IS costs S SUPPORT OPERATING GOVT CORP 600,000 $ 2,400,000 $ 4,756,000 S 12452,000 $ 24,208,000 () (600.000) 320,000 280.000 (2,400,000) 800,000 1.600.000 OS $ 9,878,000 S 14,332,000 $ 24,208,000 AS IS Total S Total budgeled overhead of operaling departments $ 600,000 S 2,400,000 S 8.750,000 $ 12,452,000 S 24,208,000 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 40% i 25% 35% Step-down method (AS first) 100% 10% D 30% 617 100 Operating Departments Support Departments AS IS Print Done GOVT CORP Total Step-down Method Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs $ 600,000 $ 2,400,000 $ 8,756,000 $ 12,452,000 S 24,208,000 (600,000) 150,000 240,000 210,000 Allocation of IS coets 2,560,000 (2,550,000) 650,000 1,700,000 0 $ 9,816,000 $ 14,362,000 S 24,208,000 Total budgeted overhead of operating departments Step-down method (IS first) i - X X Reference Support Departments Operating Departments AS IS GOVT CORP Total CORP S 1,880.000 Direct method Step-down (AS Trst) Step (IS first) GOVT 1,120,000 $ 1,090,000 1.100 Step-down Method Budgeted overhead costs before interdeparini cresi allocations Allocation of IS costs 1.910.000 1.632.000 Choose from any drop-down list and then click $ 800,000 S 2.400.000 $ 8,758,000 $ 12,452,000 S 24 200 000 240,000 2,400,000 720.000 1.440,000 a 840,000 1840,000) 448,000 382,000 0 $ 9,924 000 $ 14,284,000 S 24 200 000 Allocation of AS costs Done 5 parts remaining Print Total budgeted twerhead of operating departments 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.) Support Departments Operating Departments AS IS GOVT CORP Total Reciprocal Method Budgeted overhead costs $ before interdepartment cost allocations Allocation of AS costs 600,000 $ 2,400,000 $ 8,756,000 $ 12,452,000 $ 24,208,000 (861,539) 215,385 344,616 301,539 261,539 (2,615,385) 784,616 1,569,231 Allocation of IS costs $ 0 $ 0 $ 9,885,232 $ 14,322,770 $ 24,208,000 Total budgeted overhead of operating departments 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.) Support Departments Operating Departments AS IS GOVT CORP Total Reciprocal Method Budgeted overhead costs before interdepartment cost allocations First allocation of AS costs First allocation of IS costs Second allocation of AS costs Second allocation of IS costs