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Houstin Partners provides management consulting services to government and corporate clients. Houstin 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, Houstin's cost records indicate the following: (Click the icon to view the cost records.) Read the requirements. Requirements 1. Allocate the two support departments' costs to the two operating departments using the reciprocal method. Use (a) linear equation and (b) repeated iterations. 2. Compare and explain differences in requirement 1 with those of the direct method and the step down method. Which method do you prefer? Why? Requirement 1a. Allocate the two support departments' costs First, determine the linear equations for each support departme IS AS= $660,000 + 0.10 Print Done IS= $3,900,000 + 0.20 AS Now allocate the support departments' costs (AS and IS department costs that you actemmince in the prior steps to the me operating departments us Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.) Operating Departments Support Departments AS Reciprocal Method IS GOVT CORP Total Budgeted overhead costs before interdepartment cost allocations 660,000 3,900,000 7,500,000 12,490,000 24,550,000 Allocation of AS costs Allocation of IS costs Total budgeted overhead of operating departments Help me solve this Etext pages Get more help - A The two support depa method (AS departme (Click the icon to (Click the icon to ENClick the icon to v - X icon to vi reciprocar method. (Rounc -and two operating departments-government consulting (GOVT) cost records indicate the following: Data table WO nt cos alloc t Dep 0,000 Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS (budgeted head count) Support work supplied by IS (budgeted computer time) 3,900,000 method (AS department first) and the step-down method (IS departm (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).) (Click the icon to view a summary of the three methods.) - X SUPPORT OPERATING AS IS GOVT CORP Total $ 660,000 $3,900,000 $ 7,500,000 $ 12,490,000 $ 24,550,000 0 20% 48% 32% 100% 10% 0 27% 63% 100% Done Print 7,500,000 12,490,000 24,550,000 O imal places, Osts artm depa artmer Su Direct method Direct Method Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs Allocation of IS costs Total budgeted overhead of operating departments 33888 7500000 (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).) - Support Departments Operating Departments AS IS GOVT CORP Total $ 660,000 $3,900,000 $ 7,500,000 $ 12,490,000 $ 24,550,000 (660,000) 396,000 264,000 (3,900,000) 1,170,000 2,730,000 0$ 9,066,000 $ 15,484,000 $ 24,550,000 $ Print OS Done XXX, tion systems (IS) and two operating departments-government consulting (GOVT) of 2017, Houstin's cost records indicate the following: Step-down method (AS first) Step-down Method Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs Allocation of IS costs Total budgeted overhead of operating departments nts' costs t departm IS AS nd IS depa departmen Su nts $ $ two operatin method (AS department first) and the step-down method (IS department first (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)) X Operating Departments Support Departments AS IS GOVT CORP Total 12,490,000 $ 24,550,000 660,000 $3,900,000 $ 7,500,000 $ 132,000 (660,000) 316,800 211,200 0 4,032,000 (4,032,000) 1,209,600 2,822,400 OS 9,026,400 $ 15,523,600 $ 24,550,000 Print $ Done XXX, a partments' costs support departm 0 IS 20 AS (AS and IS depa easing departmen Su artments Step-down method (IS first) Step-down Method Budgeted overhead costs before interdepartment cost allocations Allocation of IS costs Allocation of AS costs Total budgeted overhead of operating departments S $ Print (Click the icon to view the step-down method (AS first).) ENClick the icon to view the step-down method (IS first)) Support Departments Operating Departments AS IS GOVT CORP Total 660,000 $3,900,000 $ 7,500,000 $12,490,000 S$ 24,550,000 390,000 (3,900,000) 1,053,000 2,457,000 $ 0 1,050,000 (1,050,000) 630,000 420,000 0 $ 9,183,000 $ 15,367,000 $ 24,550,000 TE Done , XXX, and yo Reference ng departme you determin costs. Enter a ents Op IS 900,000 7,500,000 4 Direct method Step-down (AS first) Step-down (IS first) 12,490,000 24,550,000 $ Print GOVT (Click the icon to view the step-down method (Click the icon to view a summary of the three - X CORP 1,566,000 $ 1,526,400 1,683,000 Done 2,994,000 3,033,600 2,877,000 lations to thr EIR 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. AS= $660,000 + 0.10 IS 4 IS= $3,900,000+ 0.20 AS Now allocate the upport departments' costs (AS and IS department costs that you determined in the prior step) to the two operating departments using the re Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.) Operating Departments Support Departments AS Reciprocal Method IS GOVT CORP Total Budgeted overhead costs before interdepartment cost allocations 660,000 3,900,000 7,500,000 12,490,000 24,550,000 Allocation of AS costs Allocation of IS costs Total budgeted overhead of operating departments Help me solve this Etext pages Get more help