Question 4 (Total = 12 marks) Pandora Co. Ltd ("Pandora") provides management consulting services to government and corporate clients. Pandora has two support departments-administrative services (AS) and information systems (IS)and two operating departments-government consulting (PUBLIC) and corporate consulting (PRIVATE). For the first quarter of 2017, Pandora's cost records indicate the following: SUPPORT OPERATING AS IS PUBLIC PRIVATE TOTAL $600,000 $2,400,000 $8,756,000 $12,452,000 $24,208,000 Budgeted overhead costs before any inter- department cost allocations Support work supplied by AS (budgeted head count) Support work supplied by IS (budgeted computer time) 0% 25% 40% 35% 100% 10% 0% 30% 60% 100% Required: a Allocate the two support departments' costs to the two operating departments using the following methods: (3 marks) i/ Direct method ii/ Step-down method (allocate IS first) iii/ Step-down method (allocate AS first) b. In no more than 200 words, explain which step-down method (IS first Vs AS first) is preferable and why? Numerical computations are excluded from the word count. (9 marks)