h tlas two suppu ve services (AS) and information systems (IS -and first) and th

Question

h tlas two suppu ve services (AS) and information systems (IS -and first) and the step-down method (IS department first). The resul -government consulting (GOVT) and corporate are as follows: Data Table SUPPORT OPERATING AS IS GOVT CORP Total Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS (budgeted head count) Support work supplied by IS (budgeted computer time) 660,000 s 3,900,000 s 8 825,000 s 12,490,000 S 25,875,000 20% 48% 32% 100% 10% 27% 63% 100% Print Done

Explanation / Answer

AS=$ 660,000

IS=$3,900,000

AS=$ 660,000+ 10 % of IS

IS= $ 3,900,000+ 20 %of AS

By solving this:-

AS=$ 660,000+ 10 % of IS

AS =$660,000 +10%(3,900,000+20% of AS)

AS=$660,000+$390,000+0.20AS

AS-0.20AS=$1,050,000

0.80AS=$1,050,000

AS=$ 1,312,500

IS= $ 3,900,000+ 20 %of AS

=$3,900,000+ 20%($ 1,312,500)

=$4,162,500

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