Question: Support division cost allocation, reciprocal method (continuation of 14-20). Refer to the data given in Exercise 14-20. REQUIRED 1. Allocate the two support divisions costs

Support division cost allocation, reciprocal method (continuation of 14-20). Refer to the data given in Exercise 14-20.

REQUIRED
1. Allocate the two support divisions€™ costs to the two operating divisions using the reciprocal method. Use
(a) Linear equations
(b) Repeated iterations.
2. Compare and explain differences in requirement 1 with those in requirement 1 of Exercise 14-20. Which method do you prefer? Why?

Support Operating AS IS Govt.CorpTotal Budgeted overhead costs S600,000 S2,400,000 $8,756,000 $12,452,000 S24,208,000 before any interdepartment cost allocations (budgeted head count,) (budgeted computer time) Support work supplied by AS- 25% 40% 35% 100% Support work supplied by IS 1096 30% 60% 100%

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