Catoire Consultancy Uses the Direct Method to Allocate Its Service

question 1

Essay

Catoire Consultancy uses the direct method to allocate its service department costs to its operating departments. The company has two service departments, Information Technology and Administration, and two operating departments, Corporate Practice and Government Practice. Data concerning those departments follow: Information Technology Department costs are allocated on the basis of computers and Administration Department costs are allocated on the basis of employees.
Required:
Allocate the service department costs to the operating departments using the direct method.

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Definitions:

Robert Cialdini

A psychologist known for his work on persuasion, compliance, and negotiation.

Correspondence Bias

The tendency to attribute a person's behavior too much to their personality and too little to the situation they are in.

Fundamental Attribution Error

The inclination to overly focus on individual traits while disregarding environmental influences when evaluating the actions of others.

Correspondence Bias

The tendency to attribute a person's behavior to their personality or disposition, rather than to external factors.