Vikram As the managing partner of Sheridan Accounting Services (HAS), Adam is trying to compare the profitability results of the firm's threedifferent business lines: Audit, Tax, and Advisory Services. These three operating divisions are supported by three supportdepartments: Billing, Human Resources, and IT. The cost drivers (or allocation bases) for each of the support departments, along witheach department's usage of those services and its own original costs, are as follows.Original costBilling hours usedNumber of employeesIT hours used(a)Total $BillingS2100Support DepartmentsHR$63,000 $111,000AuditeTextbook and Media200IT$93,0001200TaxOperating DivisionsOperating DepartmentsAudit$486,000 $763,0001,4002,00012Tax90015600Totals$350,000 $1,866,000Advisory600Rank the three support departments by their original costs, and then allocate the support department costs using the stepmethod. (Round intermediate calculations to 4 decimal places, eg. 15.2516 and final answers to 2 decimal places, eg. 15.25.)Advisory33004,000352,300ArristanceTotal

The process of allocating indirect costs among various cost objects (such as products, departments,…

As the managing partner of Sheridan Accounting Services (HAS), Adam is trying to compare the profitability results of the firm's three different business lines: Audit, Tax, and Advisory Services. These three operating divisions are supported by three support departments: Billing, Human Resources, and IT. The cost drivers (or allocation bases) for each of the support departments, along with each department's usage of those services and its own original costs, are as follows. Original cost Billing hours used Number of employees IT hours used (a) Total $ Support Departments Billing $63,000 Audit 2 100 HR $111,000 2 200 IT $93,000 1 200 Tax Audit Tax $486,000 $763,000 Operating Divisions 2,000 Operating Departments 12 900 1,400 15 600 Advisory $350,000 600 3 Rank the three support departments by their original costs, and then allocate the support department costs using the step method. (Round intermediate calculations to 4 decimal places, eg. 15.2516 and final answers to 2 decimal places, eg. 15.25.) 300 Advisory Totals $1,866,000 4,000 35 2,300 Total