You are the budget officer and are working to identify the direct and indirect costs of a new processing department that has several machines. This department's manager instructs you to classify a majority of the costs as indirect to take advantage of the direct labor-based overhead allocation method so it will be charged a lower amount of overhead (because of its small direct labor cost). This would penalize other departments with higher allocations. It also will cause the performance ratings of managers in these other departments to suffer.

What action do you take?