Question

advanced computer solutions, incorporated has two main services: (1) time on a timeshared computer system and (2) proprietary computer programs. the operation department (op) provides computer time and the programming department (p) writes programs. the percentage of each service used by each department for a typical period is: supplied user op p op --- 35% p 25% --- sold to customers 75% 65% in a typical period, the operation department (op) spends $6,400 and the programming department (p) spends $4,400. under the step method (op first), what is the cost of the computer time and the computer programs for sale? time programs a. $ 6,400 $ 4,400 b. $ 4,800 $ 6,000 c. $ 1,600 $ 9,200 d. $ 4,160 $ 6,640

Answer 1

Step-by-step explanation:

Using the step method, we can determine the cost of computer time and computer programs for sale as follows:

Calculate the total cost of each department's operations:

Operation department (OP): $6,400

Programming department (P): $4,400

Allocate the costs of each department's operations based on the percentage of services used:

OP supplies 35% of time and 75% of programs, so allocate 35% of OP's cost to time and 75% of OP's cost to programs:

Time: $6,400 x 35% = $2,240

Programs: $6,400 x 75% = $4,800

P supplies 25% of time and 65% of programs, so allocate 25% of P's cost to time and 65% of P's cost to programs:

Time: $4,400 x 25% = $1,100

Programs: $4,400 x 65% = $2,860

Add up the allocated costs for each service:

Time: $2,240 + $1,100 = $3,340

Programs: $4,800 + $2,860 = $7,660

Therefore, the cost of computer time and computer programs for sale is $3,340 and $7,660, respectively.

Answer: (a) $6,400 for time and $4,400 for programs are the total costs of each department's operations, not the allocated costs of each service.