Seattle Partners provides management consulting services to government and corporate clients. Seattle 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 2020, Seattle's cost records indicate the following: Requirement 1a. Allocate the two support departments' costs to the two operating departments using the direct method. (Do not round intermediary calculations and round your 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 balances.) Direct Method Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs Allocation of IS costs Total budgeted overhead of operating departments Support Departments Operating Departments AS IS GOVT CORP Total Data table A B 1 SUPPORT 2 AS IS Budgeted overhead costs before any $ 3 interdepartment cost allocations Support work supplied by AS 4 (budgeted head count) Support work supplied by IS 5 (budgeted computer time) D E F OPERATING GOVT CORP Total 690,000 $1,800,000 $ 8,825,000 $ 12,450,000 $ 23,765,000 0 20% 52% 28% 100% 10% 0 36% 54% 100% Print Done Requirements 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. 3. What approaches might be used to decide the sequence in which to allocate support departments when using the step-down method? Print Done - Direct method Direct Method Support Departments Operating Departments AS IS GOVT CORP Total Budgeted overhead costs before interdepartment cost allocations $ 600,000 $ 6,000,000 $ 8,675,000 $ 12,420,000 $ 27,695,000 Allocation of AS costs (600,000) 360,000 240,000 Allocation of IS costs (6,000,000) 1,800,000 4,200,000 $ 0 $ Total budgeted overhead of operating departments 0 $ 10,835,000 $ 16,860,000 $27,695,000 il Print Done Step-down method (AS first) Step-down Method Support Departments Operating Departments AS IS GOVT CORP Total Budgeted overhead costs before interdepartment cost allocations $ Allocation of AS costs 120,000 600,000 $6,000,000 $ 8,675,000 $ (600,000) 12,420,000 $ 27,695,000 288,000 192,000 $ 0 6,120,000 Allocation of IS costs Total budgeted overhead of operating departments (6,120,000) 1,836,000 4,284,000 $ 0 $ 10,799,000 $ 16,896,000 $ 27,695,000 Step-down method (IS first) Step-down Method Support Departments Operating Departments AS IS GOVT CORP Total Budgeted overhead costs before interdepartment cost allocations $ Allocation of IS costs 600,000 $ 6,000,000 $ 8,675,000 $ 12,420,000 $ 27,695,000 600,000 (6,000,000) 1,620,000 3,780,000 0 $ 1,200,000 Allocation of AS costs (1,200,000) 720,000 480,000 $ 0 $ 11,015,000 $ 16,680,000 $ 27,695,000 Total budgeted overhead of operating departments Print Done -