i Data Table Bt ht SUPPORT OPERATING AS IS GOVT CORP Total no $ 600,000 $ 2,400,000 $ 8,756,000 $ 12,452,000 $ 24,208,000 no Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS (budgeted head count) Support work supplied by IS (budgeted computer time) 0 25% 40% 35% 100% 10% 0 30% 60% 100% Print Done Direct method X 1 Support Departments Operating Departments AS IS GOVT CORP Total al BE $ Direct Method Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs Allocation of IS costs Total budgeted overhead of operating departments 600,000 $2,400,000 $ 8,756,000 $ 12,452,000 $ 24,208,000 (600,000) 320,000 280,000 (2,400,000) 800,000 1,600,000 0 $ OS 9,876,000 $ 14,332,000 $ 24,208,000 30 $ e Print Done budgeted overhead of operating departments ovemment cons Step-down method (AS first) Support Departments Operating Departments IS AS GOVT CORP Total Step-down Method Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs $ $ 600,000 $ 2,400,000 $ 8,756,000 $ 12,452,000 $ 24,208,000 (600,000) 150,000 240,000 210,000 0 2,550,000 (2,550,000) 850,000 1,700,000 $ 0 $ 9,846,000 $ 14,362,000 $ 24,208,000 Allocation of IS costs Total budgeted overhead of operating departments Print Done Step-down method (IS first) Support Departments Operating Departments GOVT CORP AS IS Total Step-down Method Budgeted overhead costs before interdepartment cost allocations Allocation of IS costs $ $ 600,000 $ 2,400,000 $ 8,756,000 $ 12,452,000 $ 24,208,000 240,000 (2,400,000) 720,000 1.440,000 0 840,000 (840,000) 448,000 392,000 0 $ 9,924.000 $ 14,284.000 $ 24,208,000 Allocation of AS costs Total budgeted overhead of operating departments $ Print Done hod Reference Ihrec g de nt ng ng GOVT CORP these $ $ 1,120,000 $ 1,880,000 Direct method Step-down (AS first) Step-down (IS first) 1,910,000 1,090,000 1,168,000 1,832,000 oc Print Done JO Now allocate the support departments' costs (AS and IS department costs that you determined in the prior step) to the two operating departments using the reciprocal method. (Round decimal calculations to three decimal places, XXX, and your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "o" for any zero balances.) Support Departments Operating Departments Reciprocal Method AS IS GOVT CORP Total Budgeted overhead costs before interdepartment cost allocations 600000 2400000 8756000 12452000 24208000 Allocation of AS costs Allocation of IS costs Total budgeted overhead of operating departments 1. Allocate the two support departments' costs to the two operating departments using the reciprocal method. Use (a) linear quation and (b) repeated iterations. 2. Compare and explain differences in requirement 1 with those of the direct method and the step down method. Which method do you prefer? Why? Print Done