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William is the owner of a software company where approximately two-thirds of sales are from new software installations. The remaining revenues come from upgrading previous

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William is the owner of a software company where approximately two-thirds of sales are from new software installations. The remaining revenues come from upgrading previous installations or performing repairs for his software clients. To date, he has evaluated these business lines using only gross margin percentages. With the ever-increasing support costs needed, though, William wants to assign these support costs to each business line as well. This will give him a better sense of how each business line helps to cover the company's total costs. Sales and cost information is as follows, along with William's proposed cost driver usage information. Calculate activity rates for each category of support cost using the cost and driver information provided. Then allocate indirect costs to each business line. Total applied operating costs for both lines

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