Requirements 1. Determine the costs allocated to the retail and industrial divisions using the direct method. 2. Determine the costs allocated to the retail and industrial divisions using the step-down method. The personnel department costs should be allocated first. The retail division has Activity 1 and Activity 2 and the industrial division has Activity 3, Activity 4, and Activity 5. The company has decided to allocate personnel costs on the basis of number of employees and administrative on the basis of the direct costs of the activities in each division. However, administrative services are provided only to activities 2 and 3 , so no administrative costs are allocated to activities 1, 4 , and 5