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Q5. (30% of test) Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support departments-administrative services (AS) and information systems

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Q5. (30% of test) 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 govemment consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2013, Phoenix's cost records indicate the following AS CORP 12,452,000 24,208,000 GOVT Total Budgeted overhead: before Inter-department allocations] Support by AS (Budgeted head count) Support by IS (Budgeted head count) S600,00 2.400,000 8.756,000 35% 60% 25% 40% 30% 100% 100% 10% Allocate the two support departments' costs to the two operating departments using the following method a. Step-down method (allocate AS first). b. Allocate the two support departments' costs to the two operating departments using the reciprocal method. Use either (a) linear equations OR (b) repeated iterations, BUT NOT BOTH

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