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
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
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