UN LULU Departmental cost allocation, university computer service centre. A computer service centre of National University serves two major users, the College of Engineering and the College of Humanities and Sciences (H&S). REQUIRED 1. When the computer equipment was initially installed, the procedure for cost allocation was straightforward. The actual monthly costs were com- piled and divided between the two colleges on the basis of the computer time used by each. In October, the costs were $100,000. H&S used 100 hours and Engineering used 100 hours. How much cost should be allo- cated to each college? Suppose costs were $110,000 because of various inefficiencies in the operation of the computer centre. How much cost would then be allocated? Does such an allocation seem justified? If not, what improvement would you suggest? 2. Use the same approach as in requirement 1. The actual cost behaviour pattern of the computer centre was $80,000 fixed cost per month plus S100 variable cost per hour used. In November, H&S used 50 hours and Engineering used 100 hours. How much cost would be allocated to each college? Use a single-rate method. As the computer service centre developed, a committee was formed that included representatives of H&S and Engineering. This committee de- termined the size and composition of the centre's equipment. The com- mittee based its planning on the long-run average utilization of 180 monthly hours for H&S and 120 monthly hours for Engineering. Sup- pose the $80,000 fixed costs are allocated through a budgeted monthly lump sum based on long-run average utilization. Variable costs are allo- cated through a budgeted unit rate of $100 per hour. How much cost should be allocated to each college? What are the advantages of this dual-rate allocation method over other methods? mlffort of Iamn sum allocations of fixed TT 1:11