Phoenix Partners provides management consulting services to government and corporate clients. Phoenix 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, Phoenix's cost records indicate the following: 2 (Click the icon to view the cost records.) 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: (Click the icon to view the direct method.) (Click the icon to view the step-down method (AS first).) (Click the icon to view the step-down method (IS first).) Step-down method (IS first) (Click the icon to view a summary of the three methods.) Read the requirements Support Departments Operating Departments Requirement 1a. Allocate the two support departments' costs to the two operating departments using the reciprocal method. -X Data Table Step-down Method AS IS GOVT CORP Total First, determine the linear equations for each support department AS= Budgeted overhead costs before interdepartment cost allocations S 12.452.000 $ 24, 208,000 OPERATING 800.000 $ 240.000 SUPPORT AS IS 2.400.000 S 8.750,000 $ (2,400,000) 720.000 Allocation of IS costs 1.440.000 IS= GOVT CORP Total 0 $ S 600,000 $ 2,400,000 $ 8,750,000 $ 12,452,000 $ 24,208,000 $ 840.000 ( (840,000) 0 448.000 Allocation of AS costs Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS (budgeted head count) Support work supplied by IS (budgeted computer time) 392.000 0 25% 40% 35% s 100% $9.924,000 $ 14284,000 $ 24, 208,000 - X Direct method Total budgeted overhead of operating departments 10% 0 30% 60% 100% Print Done Support Departments Operating Departments Print Done Direct Method AS IS GOVT CORP Total Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs - X s Step-down method (AS first) 600.000 $ 2.400.000 $ 8.750,000 $12.452.000 $ 24,208,000 (600.000) 320,000 280.000 (2,400,000) 800.000 1,600.000 OS 0$ 9,870,000 14,332.000 $ 24,208.000 Allocation of IS costs $ Support Departments Operating Departments Total budgeted overhead of operating departments Step-down Method - X AS IS GOVT CORP Reference Total Print Done Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs $ 12,452,000 $ 24,208,000 600,000 $ 2,400,000 $ 8,756,000 $ (600.000) 150,000 240.000 210,000 GOVT CORP $ 0 Direct method $ 2,550,000 (2,550,000) 1.880,000 1,910,000 850,000 Allocation of IS costs 1,120,000 $ 1,090,000 1,108,000 1,700,000 Step-down (AS first) Step-down (IS first) 1.832.000 $ 0 $ 9,848,000 $ 14,362,000 $ 24,208,000 Total budgeted overhead of operating departments Print Done Print Done