Data Master Is a Computer Software Consulting Company

question 135

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.
Service Departments User Departments

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 reciprocal method. Round to the nearest whole dollar.

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Definitions:

Components of Attitudes

Consist of cognitive (thoughts), affective (feelings), and behavioral (actions) elements that describe how and why people feel the way they do about various subjects.

Favorable Reaction

Refers to a positive or approving response to a situation, action, or information.

Spinach

A leafy green vegetable rich in vitamins and minerals, often used in salads and cooked dishes.

Altruism

The selfless concern for the well-being of others, often leading to actions that benefit others at a cost to oneself.