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:

$1$Use the direct method to allocate Tampa Instrument Company's service department costs to its

production departments.

$2$Determine the proper sequence to use in allocating the firm's service department costs by the step$-$

down method.

$3$Use the step$-$down method to allocate the company's service department costs.

$4$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.