Simultaneous Solution (computer required): Tonto Electronics manufactures circuit boards through a four-step process. In the first department, the boards are washed in a chemical bath to prepare them for the etching department. After etching, the boards are dried and inspected in a third department. Completed boards that meet standards are sent to the packing department where automated equipment prepares them for shipment. Service activities are carried out in three departments: Power, Computer Support, and Engineering. A schedule of the current period costs together with the use of different service units by all departments is as follows:

Power costs are allocated using kwhr. of power consumed. Computer services are allocated based on units of computer usage. Engineering department costs are charged using engineers' time spent in each activity.

Required:

Use a spreadsheet program to compute the total costs of each producing department using the simultaneous solution method for cost allocation.

Item Direct costs Service usage: Kwhr. of power Power $582,400 Computer Support $135,600 Engineering $391,650 0 2,500 Computer units 120 0 1,500 580 Engineer's time 160 650 0 Item Washing Etching Direct costs $795,000 $1,286,500 Drying $935,800 Packing Service usage: Kwhr. of power 35,000 80,000 145,200 Computer units Engineer's time 1,700 12,600 980 220 800 310 $645,000 68,000 2,390 180