Question

1. Computer Complex, Inc. has two main services: (1) time on a time-shared computer system and (2) proprietary computer programs. Computer time is provided by the operation department (Op) and programs are written by the programming department (P).

The percentage of each service used by each department for a typical period is:

                           Supplied

User                               Op          P                     

Op                                  ---          40%

P                                    30%       ---

Sold to customers         70%       60%

In a typical period, the operation department (Op) spends $4,500 and the programming department (P) spends $2,500.

Under the step method (Op first), what is the cost of the computer time and the computer programs for sale?

               Time                Programs

1.          $4,500             $2,500
2.          $3,150             $3,850
3.          $1,350             $5,650
4.          $2,700             $4,300
5.          $3,000             $4,000

Answer 1

Time = 70% * Operation dept. cost

70% * $4,500 = $3,150

Programs = Programming Dept cost + (30% * Operation dept. cost)

$2,500 + (30% * $4,500) = $3,850

Option B is correct