Refer to the data given in the preceding exercise.

The budgeted costs in the two service departments for the year are as follows:
Library.........................................................................................$900,000
Computing Services..................................................................... 360,000

Required:

1. Use the step-down method to allocate Bay State Community College’s service department costs to the Liberal Arts and Sciences departments.

2. Construct an Excel spreadsheet to solve the preceding requirement. Show how the solution will change if the following information changes: the budgeted costs of the Library and Computing Services are $890,000 and $340,000,respectively.

Provider of Service User of Service Library Computing Services 20% Library. Computing Services Liberal Arts Sciences. . 60% : 40% 30% 50%