Data Master Is a Computer Software Consulting Company

question 101

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 step method. Allocate Information Systems first and round to the nearest whole dollar. Provide total user department costs.

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Definitions:

Oxygen Levels

The amount of oxygen present in a given environment or substance, often measured to assess air or water quality.

Inorganic Nutrients

Nutrients that do not contain carbon-hydrogen bonds, essential for plant growth, such as nitrogen, phosphorus, and potassium.

Nitrates

Inorganic compounds made of nitrogen and oxygen that are found naturally in the environment but can cause health and environmental issues at high concentrations.

Phosphates

Inorganic chemical compounds used as fertilizers and in various industrial applications, often contributing to water pollution.