Implement a cost allocation system for a consulting firm that provides two types of services Management Consulting and IT Consulting The following costs are incurred Direct Costs $500,000 Indirect Costs $300,000 Allocation Bases Management Consulting 60 of total labor hours IT Consulting 40 of total labor hours Allocate the indirect costs to each service line based on the allocation bases provided Present your calculations in a tabular format, and discuss the rationale behind the allocation method chosen

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Question: Implement a cost allocation system for a consulting firm that provides two types of services: Management Consulting and IT Consulting. The following costs are incurred:

Implement a cost allocation system for a consulting firm that provides two types of services: Management Consulting and IT Consulting. The following costs are incurred:

- Direct Costs: $500,000
- Indirect Costs: $300,000
- Allocation Bases:
  - Management Consulting: 60% of total labor hours.
  - IT Consulting: 40% of total labor hours. Allocate the indirect costs to each service line based on the allocation bases provided. Present your calculations in a tabular format, and discuss the rationale behind the allocation method chosen.

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