Hudson Community College enrolls students in two departments, Liberal Arts and

Sciences. The college also has two service departments, the Library and the Compu$$ng

Services Department. The usage of these two service departments$$ output for the year is

as follows:

Use of service Provider of service

Library Compu$$ng services

Library $-20\%$

Compu$$ng services $--$

Liberal Arts $60\%30\%$

Sciences $40\%50\%$

The budgeted costs in the two service departments for the year are as follows:

Library: $$600,000$

Compu$$ng services: $$240,000$

Required:

$$ Use the direct method to allocate the budgeted costs of the Library and Compu$$ng Services

Department to the college$$s Liberal Arts and Sciences departments.

$$ Build a spreadsheet: Construct an Excel spreadsheet to solve the preceding requirement. Show

how the solu$$on will change if the following informa$$on changes: The budgeted costs of the

Library and Compu$$ng Services are $$590,000$ and $$280,000,$ respec$$vely$.$

$2.$ Step$-$Down Method of Service Department Cost Alloca$$on; College

Refer to the data given in the preceding exercise $($Ques$$on $1)$

Required:

$$ Use the step$-$down method to allocate Hudson Community College$$s service department costs

to the Liberal Arts and Sciences departments.

$$ Build a spreadsheet: Construct an Excel spreadsheet to solve the preceding requirement. Show

how the solu$$on will change if the following informa$$on changes: The budgeted costs of the

Library and Compu$$ng Services are $$590,000$ and $$280,000,$ respec$$vely$.$