Refer to the data given in the preceding exercise.

The budgeted costs in the two service departments for the year are as follows:

Library ………………………………                  $600,000

Computing Services …………………            240,000

Required:

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

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