1.

Looking to compare, thanks.

A) Allocate the two support departments' costs to the two operating 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 department costs allocated to each operating department?

C) What approaches might be used to decide the sequence in which to allocate support departments when using the step-down method?

					Support			Operating
					AS	IS		GOVT	CORP	Total
Budgeted Overhead Costs Before any
interdepartment cost allocations					600000	2400000		8756000	12452000	24208000
Support work supplied by AS
(budgeted head count)					0	0.25		0.4	0.35	100%
Support work supplied by IS
(budgeted computer time)					0.1	0		0.3	0.6	100%