Amalgamated Associates provides running consulting services to government and corporate clients. Ama

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Amalgamated Associates provides running consulting services to government and corporate clients. Amalgamated has two support departments – Administrative Services (AS) and Information Systems (IS) and two operating departments -Government Consulting (GC) and Corporate Consulting (CC). For the first quarter of 2013 United’s records indicate the following:SUPPORT OPERATINGASISGCCCBudgeted overhead costs before any interdepartmental cost allocations$600,000$2,400,000$8,756,000$12,452,000Support work supplied by AS (budgeted head count)-25%40%35%Support work supplied by IS (budgeted computer time)10%-30%60%Required:Allocate the two support department costs to the two operating departments using the following methods:a. Direct methodb. Step-down method (allocate AS first)2. Compare and explain differences in the support department costs allocated to each operating department.

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