Support-department cost allocation; direct and step-down methods. Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two sup- port departments-administrative services (AS) and information systems (IS)-and two operating departments-government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2017, Phoenix's cost records indicate the following: Home Insert Page Layout Formulas Data Review View в SUPPORT AS OPERATING IS GOVT CORP Total 3 Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS 5 (budgeted head count) Support work supplied by IS 6 (budgeted computer time) $600,000 $2,400,000 $8,756,000 $12,452,000 $24,208,000 25% 40% 35% 100% 10% 30% 60% 100%

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What approaches might be used to decide the sequence in which to allocate support departments when using the step-down method?

Support-department cost allocation; direct and step-down methods. Phoenix Partners
provides management consulting services to government and corporate clients. Phoenix has two sup-
port departments-administrative services (AS) and information systems (IS)-and two operating
departments-government consulting (GOVT) and corporate consulting (CORP). For the first quarter of
2017, Phoenix's cost records indicate the following:
Home
Insert
Page Layout
Formulas
Data
Review
View
в
SUPPORT
AS
OPERATING
IS
GOVT
CORP
Total
3 Budgeted overhead costs before any
interdepartment cost allocations
Support work supplied by AS
5 (budgeted head count)
Support work supplied by IS
6 (budgeted computer time)
$600,000 $2,400,000
$8,756,000 $12,452,000 $24,208,000
25%
40%
35%
100%
10%
30%
60%
100%
Transcribed Image Text:Support-department cost allocation; direct and step-down methods. Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two sup- port departments-administrative services (AS) and information systems (IS)-and two operating departments-government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2017, Phoenix's cost records indicate the following: Home Insert Page Layout Formulas Data Review View в SUPPORT AS OPERATING IS GOVT CORP Total 3 Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS 5 (budgeted head count) Support work supplied by IS 6 (budgeted computer time) $600,000 $2,400,000 $8,756,000 $12,452,000 $24,208,000 25% 40% 35% 100% 10% 30% 60% 100%
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