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rather than the sing 15-19 Support-department cost allocation; direct and step-down methods. Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has

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rather than the sing 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 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 2013, Phoenix's cost 3. What approaches might be used to decide the sequence in which to allocate support departments 4 CHAPTER 15 ALLOCATION OF SUPPORT DEPARTMENT COSTS, COMMON COSTS, AND REVENUES records indicate the following: Data Review View Home Insert Formulas Page Layout E D F B G SUPPORT OPERATING 1 AS IS GOVT 2 CORP Total 3 Budgeted overhead costs before any 4 interdepartment cost allocations $600,000 $2,400,000 $8,756,000 $12,452,000 $24,208,000 Support work supplied by AS 5 (budgeted head count) 25% 40% 35% 100% Support work supplied by IS 6 (budgeted computer time) 10% 30% 60% Required 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 100% when using the step-down method

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