Tampa Instrument Company manufactures gauges for construction machinery. The company has two

production departments: Machining and Assembly. There are three service departments: Maintenance,

Human Resources $($HR$),$ and Computer Aided Design $($CAD$).$ The usage of these service departments'

output during the year just completed is as follows:

Provision of Service Output $($in hours of service$)$

The budgeted costs in Tampa Instrument Company's service departments during the year are as

follows:

Required:

Use the direct method to allocate Tampa Instrument Company's service department costs to its

production departments.

Determine the proper sequence to use in allocating the firm's service department costs by the step$-$

down method.

Use the step$-$down method to allocate the company's service department costs.

Build a spreadsheet: Construct an Excel spreadsheet to solve requirements $1$ and $3$ above. Show

how the solution will change if the following information changes: The budgeted variable costs in

the three departments are $$60,000,$$$70,000,$ and $$55,000,$ for Human Resources, Maintenance, and

CAD, respectively.