Computer Information Services Is a Computer Software Consulting Company

question 15

Essay

Computer Information Services is a computer software consulting company.Its three major functional areas are computer programming,information systems consulting,and software training.Carol Birch,a pricing analyst in the Accounting Department,has been asked to develop total costs for the functional areas.These costs will be used as a guide in pricing a new contract.In computing these costs,Birch is considering three different methods of allocating overhead costs-the direct method,the step method,and the reciprocal method.Birch assembled the following data on overhead from its two service departments,the Information Systems Department and the Facilities Department.
Information systems is allocated on the basis of hours of computer usage; facilities are allocated on the basis of floor space.
Required:
Allocate the service department costs to the user departments using the step method.Allocate Information Systems first and round to the nearest dollar.Provide total user department costs.

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Definitions:

Kangaroo Care

Treatment for preterm infants that involves skin-to-skin contact.

Skin-to-Skin Contact

The practice of holding an infant directly against one's skin to promote bonding and physiological stability.

Low-Birth-Weight Infant

An infant born with a body weight of less than 2,500 grams (5.5 pounds), often due to premature birth or poor maternal health.

Postpartum Period

The time immediately following the birth of a child until the mother's body has returned to a near pre-pregnant state, typically considered to be about six weeks, which is critical for both maternal and infant health.