1.
Looking to compare, thanks.
A) Allocate the two support departments' costs to the twooperating departments using the following methods?
Direct Method
Step-down method (Allocate AS first)
Step -down method (Allocate IS first)
B) Compare and Explain differences in the support departmentcosts allocated to each operating department?
C) What approaches might be used to decide the sequence in whichto allocate support departments when using the step-downmethod?
| | | | | | | | | | |
| | | | | Support | | | Operating | |
| | | | | AS | IS | | GOVT | CORP | Total |
| BudgetedOverhead Costs Before any | | | | | | | |
| interdepartment cost allocations | | 600000 | 2400000 | | 8756000 | 12452000 | 24208000 |
| Supportwork supplied by AS | | | | | | | | |
| (budgetedhead count) | | | 0 | 0.25 | | 0.4 | 0.35 | 100% |
| Supportwork supplied by IS | | | | | | | | |
| (budgetedcomputer time) | | | 0.1 | 0 | | 0.3 | 0.6 | 100% |
| | | | | | | | | | |
