Olympiakos SA provides outsourcing services and advice to both government and corporate clients.

For costing purposes, Olympiakos classifies its departments into two support departments

(Administrative/Human Resources and Information Systems) and two operating departments

(Government Consulting and Corporate Consulting). For the first quarter of 2022, Olympiakos incurs the following costs in its four departments:

The actual level of support relationships among the four departments for the first quarter of 2022 was:

2 Compare and explain differences in the support department costs allocated to each operating department.
3 What criteria could determine the sequence for allocating support departments using the stepdown method? What criterion should Olympiakos use if government consulting jobs require the step-down method?

Transcribed Image Text:

Administrative/Human Resources (A/HR) Information Systems (IS) Government Consulting (GOVT) Corporate Consulting (CORP) 600 000 2 400 000 8 756 000 12 452 000