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15-19 Support department cost allocation direct and step-down methods. Phoenix Partners provides management consulting services to government and corporate clients, Phoenix has two sup port departments administrative services (AS) and information systems (181-and two operating departments government consulting GOVT) and corporate consulting (CORPI for the first quarter of 2017, Phoenix's cost records indicate the following: G Review View D E OPERATING GOVT CORP Total es Home Bet Page Layout Formulas Data A B C 1 SUPPORT 2 AS IS 3 Budgeled overhead costs before any 4 interdepartment cost allocations $800,000 $2,400,000 Support work supplied by AS 5 budgeted head count) 25% Support work supplied by IS 6 budgeted computer time) 10% $8,750,000 $12,452,000 $24.208,000 40% 35% 100% 30% 60% 100% Required 1. Allocate the two support departments' costs to the two operating departments using the following methods a. Direct method . Step-down method (allocate AS first G Cott C. Step-down method fallocate IS first) 535407 447 71 392, ale 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? 15-20 Support-deportment cost allocation, reciprocal method (continuation of 15-19. Roter to the datu given in Exercise 15-19 1. Allocate the two support departments' costs to the two operating departments using the reciprocal method. Use allinear equations and repeated iterations. 2. Compare and explain differences in requirement 1 with those in requirement of Exercise 15-19. Which method do you prefer? Why? 15-21 Direct and step-down allocation. E-books an online book retailer, has two operating departments - corporate sales and consumer sales--and two support departments-human resources and information systems. Each sales department conducts merchandising and marketing operations independently. E-books uses number of employees to allocate human resources costs and processing time to alocate information systems costs. The following data are available for September 2017: Required ES Han Page Layout View 1 Formu Data Revit C 01 E SUPPORT OPERATING DEPARTMENTS DEPARTMENTS Human Information Corporate Consumer Resources Systems Sales Sales $72,700 $234,400 $998,270 $489.800 2 3 Budgeted costs incurred before any 4 interdepartment collocations Support work supplied by human 5 resources department 6 Budgeted number of employees Support work supplied by information z systems department B Budgeted processing time in minutes 21 42 28 320 1.920 1,600 Pored 1. Allocate the support departments' costs to the operating departments using the duct method. 2. Rank the support departments based on the percentage of their services provided to other support departments. Use this ranking to allocate the support departments' costs to the operating departments based on the step-down method 1. How could you have ranked the support departments diferent