Please include all steps and show which numbers used to reach the solution. Thank you.

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 2017, Phoenix's cost records indicate the following:

SUPPORT OPERATING

AS IS GOVT CORP Total

Budgeted overhead costs before any interdepartment cost allocations $330,000 $3,000,000 $8,825,000 $12,470,000 $24,625,000

Support work supplied by AS (budgeted head count) 0 20% 52% 28% 100%

Support work supplied by IS (budgeted computer time) 10% 0 36% 54% 100%

Requirements

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?

	Support Departments		Operating Departments
Direct Method	AS	IS	GOVT	CORP	Total
Budgeted overhead costs
before interdepartment cost allocations
Allocation of AS costs
Allocation of IS costs
Total budgeted overhead of operating departments