Question: Software Plus Ltd produces flight and driving simulations and games for personal computers The company's president has a complaint about the accounting for support department

 Software Plus Ltd produces flight and driving simulations and games for

Software Plus Ltd produces flight and driving simulations and games for personal computers The company's president has a complaint about the accounting for support department costs. He points to the following table describing the use of various support departments in the company and says, 'According to this table, every department receives services from all the support departments. But I understand that only some of the support departments are bearing costs from the other support departments. Why is that?' Percentage use of services Information Games Simulation Supportdepartment Cost AdministrationMaintenance systems manufacturingmanufacturing Administration $40 000 0% 10% 50% 10% 30% Maintenance $20 000 20% 0% 10% 40% 30% Information systems $50 000 35% 5% 0% 40% 20% Required (a) What method has Software Plus Ltd been using to allocate support costs? Explain how you know. (b) Which method would ignore all interactions among support departments? Explain. (c) Which method would consider all interactions among support departments? Explain. (d) Allocate the support department costs to Games and Simulations using the stepdown method. Explain how you decided which department's costs to allocate first

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