Required information [The following information applies to the questions displayed below.] Marin Company produces two software products (Cloud-X and Cloud-Y) in two separate departments (A and B). These products are highly regarded network maintenance programs. Cloud-X is used for small networks and Cloud-Y is used for large networks. Marin is known for the quality of its products and its ability to meet dates promised for software upgrades. Department A produces Cloud-X, and department B produces Cloud-Y. The production departments are supported by two support departments, systems design and programming services. The sources and uses of the support department time are summarized as follows: From Design 400 Labor and materials (all variable) Depreciation and other fixed costs Total Programming 5,000 To Design Programming The costs in the two service departments are as follows: a. Direct Method b. Step Method (Design Department goes first) c. The Reciprocal Method (using Solver) Department A Department B 1,000 600 Design $ 110,000 76,000 $ 186,000 Department A 9,000 1,000 Programming $ 72,000 4,000 $ 76,000 Required: 1. Determine the total support costs allocated to each of the producing departments using (a) the direct method, (b) the step method (design department goes first), and (c) the reciprocal method. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Department B S $ S Total Labor Hours 15,000 2,000 Total 0 0 0
Required information [The following information applies to the questions displayed below.] Marin Company produces two software products (Cloud-X and Cloud-Y) in two separate departments (A and B). These products are highly regarded network maintenance programs. Cloud-X is used for small networks and Cloud-Y is used for large networks. Marin is known for the quality of its products and its ability to meet dates promised for software upgrades. Department A produces Cloud-X, and department B produces Cloud-Y. The production departments are supported by two support departments, systems design and programming services. The sources and uses of the support department time are summarized as follows: From Design 400 Labor and materials (all variable) Depreciation and other fixed costs Total Programming 5,000 To Design Programming The costs in the two service departments are as follows: a. Direct Method b. Step Method (Design Department goes first) c. The Reciprocal Method (using Solver) Department A Department B 1,000 600 Design $ 110,000 76,000 $ 186,000 Department A 9,000 1,000 Programming $ 72,000 4,000 $ 76,000 Required: 1. Determine the total support costs allocated to each of the producing departments using (a) the direct method, (b) the step method (design department goes first), and (c) the reciprocal method. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Department B S $ S Total Labor Hours 15,000 2,000 Total 0 0 0
Accounting Information Systems
10th Edition
ISBN:9781337619202
Author:Hall, James A.
Publisher:Hall, James A.
Chapter16: Auditing It Controls Part Iii: Systems Development, Program Changes, And Application Auditing
Section: Chapter Questions
Problem 3P
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![Required information
[The following information applies to the questions displayed below.]
Marin Company produces two software products (Cloud-X and Cloud-Y) in two separate departments (A and B). These
products are highly regarded network maintenance programs. Cloud-X is used for small networks and Cloud-Y is used for
large networks. Marin is known for the quality of its products and its ability to meet dates promised for software upgrades.
Department A produces Cloud-X, and department B produces Cloud-Y. The production departments are supported by two
support departments, systems design and programming services. The sources and uses of the support department time
are summarized as follows:
From
Design
400
Design
Programming
The costs in the two service departments are as follows:
Labor and materials (all variable)
Depreciation and other fixed costs
Total
To
Programming Department A
5,000
a. Direct Method
b. Step Method (Design Department goes first)
c. The Reciprocal Method (using Solver)
1,000
600
Design
$ 110,000
76,000
$ 186,000
Department A
Department B
9,000
1,000
Programming
$ 72,000
4,000
$ 76,000
Required:
1. Determine the total support costs allocated to each of the producing departments using (a) the direct method, (b) the step method
(design department goes first), and (c) the reciprocal method. (Do not round intermediate calculations. Round your final answers to
nearest whole dollar amount.)
Department B
SA
$
$
Total Labor
Hours
15,000
2,000
Total
0
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F80a185d2-1a05-454a-b6ca-141a15185ee9%2F3953c8d2-a7fb-4157-a83f-aee81aad02b0%2Fxtcecvd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Marin Company produces two software products (Cloud-X and Cloud-Y) in two separate departments (A and B). These
products are highly regarded network maintenance programs. Cloud-X is used for small networks and Cloud-Y is used for
large networks. Marin is known for the quality of its products and its ability to meet dates promised for software upgrades.
Department A produces Cloud-X, and department B produces Cloud-Y. The production departments are supported by two
support departments, systems design and programming services. The sources and uses of the support department time
are summarized as follows:
From
Design
400
Design
Programming
The costs in the two service departments are as follows:
Labor and materials (all variable)
Depreciation and other fixed costs
Total
To
Programming Department A
5,000
a. Direct Method
b. Step Method (Design Department goes first)
c. The Reciprocal Method (using Solver)
1,000
600
Design
$ 110,000
76,000
$ 186,000
Department A
Department B
9,000
1,000
Programming
$ 72,000
4,000
$ 76,000
Required:
1. Determine the total support costs allocated to each of the producing departments using (a) the direct method, (b) the step method
(design department goes first), and (c) the reciprocal method. (Do not round intermediate calculations. Round your final answers to
nearest whole dollar amount.)
Department B
SA
$
$
Total Labor
Hours
15,000
2,000
Total
0
0
0
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Step 1: Define direct method, step method and reciprocal method
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VIEWStep 3: Calculation of cost allocated to each department using step method(design department goes first)
VIEWStep 4: Calculation of cost allocated to each department using the reciprocal method(using solver)
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