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1.	Allocate the support departments' costs to the operating departments using the direct method.
2.	Rank the support departments based on the percentage of their services provided to other support departments. Use this ranking to allocate the support departments' costs to the operating departments based on the step-down method.
3.	How could you have ranked the support departments differently?

E-books, an online book retailer, has two operating departmentscorporate sales and consumer sales and two support departmentshuman resources and information systems. Each sales department conducts merchandising and marketing operations independently. E-books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The following data are available for September 2017: (Click the icon to view the data.) Read the requirements. Requirement 1. Allocate the support departments' costs to the operating departments using the direct method. (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances. Abbreviations used: HR = Human resources; Info. = Information.) Support Departments HR Info. Systems Operating Departments Corporate Consumer Total Costs incurred Allocation of HR costs Allocation of Info. System costs Total budgeted costs of operating departments Requirements 1. Allocate the support departments' costs to the operating departments using the direct method. 2. Rank the support departments based on the percentage of their services provided to other support departments. Use this ranking to allocate the support departments' costs to the operating departments based on the step-down method. 3. How could you have ranked the support departments differently? - Data table Support Departments Operating Departments Human Information Corporate Consumer Resources Systems Sales Sales Budgeted costs incurred before any interdepartment cost allocations $ 40,000 $ 220,000 $ 980,000 $ 510,000 Support work supplied by human resources department Budgeted number of employees 20 44 36 Support work supplied by information systems department Budgeted processing time (in minutes) 210 1,750 1,540

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