Data Performance, a computer software consulting company, has three major functional areas: computer programming, information systems consulting, and software training. Carol Bingham, a pricing analyst, has been asked to develop total costs for the functional areas. These costs will be used as a guide in pricing a new contract. In computing these costs, Carol is considering three different methods of the departmental allocation approach to allocate overhead costs: the direct method, the step method, and the reciprocal method. She assembled the following data from the two service departments, information systems and facilities:

Service Departments Production Departments

Information Systems Facilities Computer Programming Information Systems Consulting Software Training Total

Budgeted overhead $($base$)$ $ $112,000$ $ $56,000$ $ $224,000$ $ $266,000$ $ $175,000$ $ $833,000$

Information Systems $($computer hours$)6001,2003009003,000$

Facilities $($square feet$)2409606006002,400$

Required:

$1.$ Using computer usage time as the allocation base for the information systems department and square feet of floor space as the application base for the facilities department, apply overhead from these service departments to the production departments and determine the total cost of each production department using these three methods:

a$.$ Direct method.

b$.$ Step method $($both for the information systems department going first and for the facilities department going first$).$

c$.$ Reciprocal method.

$($For all requirements, do not round intermediate calculations. Round final answers to the nearest dollar. Totals may be off by $$1$ due to rounding.$)!$

Required information

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Data Performance, a computer software consulting company, has three major functional areas: computer programming,

information systems consulting, and software training. Carol Bingham, a pricing analyst, has been asked to develop total

costs for the functional areas. These costs will be used as a guide in pricing a new contract. In computing these costs,

Carol is considering three different methods of the departmental allocation approach to allocate overhead costs: the

direct method, the step method, and the reciprocal method. She assembled the following data from the two service

departments, information systems and facilities:

Required:

Using computer usage time as the allocation base for the information systems department and square feet of floor space as the

application base for the facilities department, apply overhead from these service departments to the production departments and

determine the total cost of each production department using these three methods:

a$.$ Direct method.

b$.$ Step method $($both for the information systems department going first and for the facilities department going first$).$

c$.$ Reciprocal method.

$($For all requirements, do not round intermediate calculations. Round final answers to the nearest dollar. Totals may be off by $$1$

due to rounding.$)$