Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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,

image text in transcribed

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 Information Computer Systems Software Systems Facilities Programming Consulting Training Total $83,000 $36,000 $142,000 $190,000 $140,000 $591,000 800 400 800 2,000 4,000 220 440 440 1,100 2,200 Budgeted overhead (base) Information Systems (computer hours) Facilities (square feet) 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, 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. (Round percentage calculations to 4 decimal places (e.g., 33.3333%). For all requirements, Do not round your intermediate calculations. Round your final answers to nearest whole dollar amount.) Programming Consulting Training Total a. Direct Method Step Method (Information Systems Goes First) Step Method (Facilities Goes First) Reciprocal method

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Applications Of Accounting Information Systems

Authors: David M. Shapiro

1st Edition

194999158X, 9781949991581

More Books

Students also viewed these Accounting questions

Question

=+b) What would the data values in such an indicator variable be?

Answered: 1 week ago

Question

Describe the factors influencing of performance appraisal.

Answered: 1 week ago

Question

What is quality of work life ?

Answered: 1 week ago

Question

What are the goals?

Answered: 1 week ago

Question

Are there other relevant characteristics about your key public?

Answered: 1 week ago

Question

What information remains to be obtained?

Answered: 1 week ago