1. Atlanta Partners provides management consulting services to government and The two support
departments' costs have been allocated to the two corporate clients. Atlanta has two support
departments-administrative operating departments using the direct method and the step-down
services (AS) and information systems (IS)-and two operating method (AS department first) and
the step-down method (IS departments-government consulting (GOVT) and corporate consulting
(CORP). department first). The results of the allocations are as follows: For the first quarter of
2020 , Atlanta's cost records indicate the following: (Click the icon to view the direct method.)
(Click the icon to view the cost records.) (Click the icon to view the step-down method (AS
first).) Read the requirements. (Click the icon to view the step-down method (IS first).) (Click
the icon to view a summary of the three methods.)
answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing
departments by allocating costs. Enter a "0" for any zero balances.)
Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for
any zero balances.)
Requirement 2. Compare and explain differences in requirement 1 with those of the direct
method and the step down method. Which method do you prefer? Why? Begin by entering the
total support-department costs allocated to each operating department under each of the methods
below.
Data table
Direct method
Step-down method (AS first)
Step-down method (IS first)
Reference
Requirements 1. Allocate the two support departments' costs to the two operating departments
using the reciprocal method. Use (a) linear equation and (b) repeated iterations. 2. Compare and
explain differences in requirement 1 with those of the direct method and the step down method.
Which method do you prefer? Why?