round decimal calculations to three decimal placed .xxx and your final answers to the nearest whole dollar. use parentheses or a minus sign when decreasing departments by allocating costs. enter 0 for any sero balances
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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 2017, Phoenix's cost records indicate the following: (Click the icon to view the cost records.) Data Table SUPPORT OPERATING GOVT CORP AS Total $ 600,000 $ 2,400,000 $8,756,000 $ 12,452,000 $ 24,208,000 Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS (budgeted head count) Support work supplied by IS (budgeted computer time) 25% 40% 35% 100% 10% 3096 60% 100% Print Done The two support departments' costs have been allocated to the two operating departments using the direct method and the step-down method (AS department first) and the step-down method (IS department first). The results of the allocations are as follows: 3) 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.) Direct method Support Departments Operating Departments GOVT CORP AS Total 2,400,000 $ Direct Method Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs Allocation of IS costs Total budgeted overhead of operating departments 600,000 $ (600.000) 8.756,000 $ 320,000 B00.000 9,876,000 $ 12.452,000 $ 24,208,000 280,000 1.600,000 14,332,000 $ 24,208,000 (2,400,000) Print Done Support Departments Operating Departments CORP GOVT Step-down Method Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs 600.000 $ 2.400.000 S 8.756.000 $ (600.000) 150.000 240,000 12,452,000 $ 24,208,000 210,000 2,550,000 2.550.000) 850,000 Allocation of IS costs Total budgeled overhead of operating departments 1.700.000 4,362.000 $ 24,208,000 Doner Step-down method (IS first) Support Departments AS Operating Departments GOVT CORP Total Step-down Method Budgeted overhead costs before interdepartment cost allocations Allocation of IS costs 600,000 $ 240,000 2.400,000 $8.756,000 S (2,400,000) 720.000 12.452,000 S 24,208,000 1.440,000 840.000 (840.000) 448,000 392.000 Allocation of AS costs Total budgeted overhead of operating departments 9.924 000 S 14 284,000 S 24,208,000 i Reference Direct method Step-down (AS first) Step-down (is first) GOVT 1. 120.000 $ 1,090,000 1 168.000 CORP 1,880,000 1,910,000 1.832.000 Print Done . Now allocate the support departments' costs (AS and is department costs that you determined in the prior step) to the two operating departments usir final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero Support Departments Operating Departments Reciprocal Method AS IS GOVT CORP Total Budgeted overhead costs before interdepartment cost allocations 600,000 2,400,000 8,756.000 1 2452,000 24,208,000 Allocation of AS costs (861,538) 215,385 344,615 301,538 Allocation of IS costs 2.572,308 (2.572.308) 771,692 1.543,385 9.872 307 Total budgeted overhead of operating departments 14,296,92324,208,000 Enter any number in the edit fields and then click Check Answer. 0 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 Compare and ex.viain differences in requirement 1 with those of the direct method and the step down method. Which method do you prefer? Why? 2. Print Done
