Computer Information Services Is a Computer Software Consulting Company

question 64

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 direct method.(Round to the nearest dollar and provide total user department costs)

---

Definitions:

Cultural Differences

The variations in the practices, customs, and behaviors of different societies or groups of people.

Motivation

The combination of forces that drive people to satisfy their needs.

Psychographics

The study of personality, values, opinions, attitudes, interests, and lifestyles of people, used in market research.

Demographics

Statistical data relating to the population and particular groups within it, often used for marketing, policy-making, and social research.