Refer to the data given in the preceding problem. When Tampa Instrument Company established its service departments, the following long–run needs were anticipate
Long-Run Service Needs (in hours of service) | |||
Provider of Service | |||
User of Service | HR | Maintenance | CAD |
HR | – | – | – |
Maintenance | 500 | – | – |
CAD | 1,000 | 800 |
|
Machining | 3,500 | 4,800 | 4,800 |
Assembly | 5,000 | 2,400 | 1,200 |
Total | 10,000 | 8,000 | 6,000 |
Required: Use the dual approach in conjunction with each of the following methods to allocate Tampa Instrument Company's service department costs: (1) direct method and (2) step-down method.
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