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Please answer fully question and show all steps 16-19 Support-department cost allocation; direct and step-down methods. Phoenix Partners provides management consulting services to government and
Please answer fully question and show all steps
16-19 Support-department cost allocation; direct and step-down methods. 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 departments--government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2020, Phoenix's cost records indicate the following: Home Insert A Page Layout G Formulas Data B C SUPPORT AS IS Review View D E F OPERATING GOVT CORP 1 N Total 4 $600,000 $2,400,000 $8,756,000 $12,452,000 $24,208,000 3 Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS 5 (budgeted head count) Support work supplied by IS 6 (budgeted computer time) 25% 40% 35% 100% 10% 1 30% 60% 100% 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 Step by Step Solution
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