Data Master Is a Computer Software Consulting Company

question 68

Essay

Data Master is a computer software consulting company. Its three major functional areas are computer programming, information systems consulting, and software training. Cynthia Moore, 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, Moore is considering three different methods of allocating overhead costs: the direct method, the step method, and the reciprocal method. Moore assembled the following data on overhead from its two service departments, the Information Systems Department and the Facilities Department.
Information systems are 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 whole dollar and provide total user department costs.)

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Definitions:

Radioactive Isotope

An isotope of an element that has an unstable nucleus and emits radiation during its decay to a stable form.

Fluorodeoxyglucose

A radioactive tracer used in positron emission tomography (PET) imaging to observe metabolic processes in the body.

Positrons

Antiparticles of electrons, possessing the same mass as an electron but with a positive charge.

Photon-Emission Tomography

A nuclear medicine imaging technique that produces 3D images of functional processes in the body by detecting pairs of gamma rays emitted indirectly by a positron-emitting radionuclide.