Siemens allocates its administrative costs to its production departments. In May 2041, the following costs are provided:

• IT Department: $4,000,000
• HR Department: $2,500,000
• Production Departments: Electronics ($5,000,000), Healthcare ($3,000,000)

Requirements:

• Allocate service department costs using the step-down method.
• Calculate the total cost for each production department.
• Prepare a cost allocation report.
• Analyze the impact of cost allocation on departmental performance.