Question

Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses...

Service Department Charges and Activity Bases

Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October.

CCS Service
Category

Activity Base

Budgeted Cost
Budgeted Activity
Base Quantity
Help desk Number of calls $99,320 2,600
Network center Number of devices monitored 535,575 9,650
Electronic mail Number of user accounts 78,650 7,150
Smartphone support Number of smartphones issued 160,160 9,100

One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector:

• The sector has 3,000 employees, of whom 40% are office employees.

• All the office employees have been issued a smartphone, and 90% of them have a computer on the network.

• 90 percent of the employees with a computer also have an e-mail account.

• The average number of help desk calls for October was 1 call per individual with a computer.

• There are 320 additional printers, servers, and peripherals on the network beyond the personal computers.

a. Determine the service charge rate for the four CCS service categories for October. Round your answers to two decimal places.

CCS Service Category Service Charge Rate
Help desk $ Per call
Network center $ Per device monitored
Electronic mail $ Per user or e-mail account
Smartphone support $ Per smartphone issued

b. Determine the charges to the COMM sector for the four CCS service categories for October. Round your answers to the nearest dollar amount.

October charges to the COMM sector:
Help desk charge $
Network center charge $
Electronic mail charge $
Smartphone support charge $

Homework Answers

Answer #1

a. Determine the service charge rate for the four CCS service categories for October. Round your answers to two decimal places.

Help desk =$99,320/2,600= $38.2 per call

Network center= $535,575/9,650=55.5 per device monitored

Electronic mail = $78,650/7,150=11per e-mail account

Smartphone support= $160,160/9,100=17.6per smartphone issued

b. Determine the charges to the COMM sector for the four CCS service categories for October. Round your answers to the nearest dollar amount.

Help desk charge: (3,000 employees × 40% × 90% × 1.0) × $38.2/call = $41256

Network center charge: [(3,000 employees × 40% × 90%) + 320] × $55.50/device = $77700

Electronic mail: (3,000 employees × 40% × 90% × 90%) × $11/e-mail account = $10692

Smartphone support: (3,000 employees × 40%) × $17.60/phone extension = $21120

****IN CASE OF ANY DOUBTS FEEL FREE TO COMMENT

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
ABC Corporation has three service departments with the following costs and activity base: Service Department Cost...
ABC Corporation has three service departments with the following costs and activity base: Service Department Cost Activity Base for Allocation Graphics Production $200,000     number of copies Accounting 500,000     number of invoices processed Personnel Department 400,000     number of employees ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows: Micro Macro Super Direct revenues $700,000 $850,000 $650,000 Direct operating expenses 50,000 70,000 100,000 Number of copies made 20,000 30,000 50,000 Number of invoices...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $64,488, and the Purchasing Department had expenses of $28,160 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $86,912, and the Purchasing Department had expenses of $39,530 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
Service Department Charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are...
Service Department Charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $36,840, and the Purchasing Department had expenses of $12,470 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
ervice Department Charges In divisional income statements prepared for Mills Construction Company, the Payroll Department costs...
ervice Department Charges In divisional income statements prepared for Mills Construction Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll checks, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $41,144, and the Purchasing Department had expenses of $17,690 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from...
Elite Lawn & Plowing (EL&P) is a lawn and snow plowing service with both residential and...
Elite Lawn & Plowing (EL&P) is a lawn and snow plowing service with both residential and commercial clients. The owner believes that the commercial sector has more growth opportunities and is considering dropping the residential service. Twenty employees worked a total of 41,000 hours last year, 28,000 on residential jobs and 13,000 on commercial jobs. Wages were $14 per hour for all work done. Any materials used are included in overhead as supplies. All overhead is allocated on the basis...
Elite Lawn & Plowing (EL&P) is a lawn and snow plowing service with both residential and...
Elite Lawn & Plowing (EL&P) is a lawn and snow plowing service with both residential and commercial clients. The owner believes that the commercial sector has more growth opportunities and is considering dropping the residential service. Twenty employees worked a total of 42,000 hours last year, 26,000 on residential jobs and 16,000 on commercial jobs. Wages were $16 per hour for all work done. Any materials used are included in overhead as supplies. All overhead is allocated on the basis...
Elite Lawn & Plowing (EL&P) is a lawn and snow plowing service with both residential and...
Elite Lawn & Plowing (EL&P) is a lawn and snow plowing service with both residential and commercial clients. The owner believes that the commercial sector has more growth opportunities and is considering dropping the residential service. Twenty employees worked a total of 33,000 hours last year, 22,000 on residential jobs and 11,000 on commercial jobs. Wages were $16 per hour for all work done. Any materials used are included in overhead as supplies. All overhead is allocated on the basis...
Background Personal Trainer, Inc. owns and operates fitness centers in a dozen Midwestern cities. The centers...
Background Personal Trainer, Inc. owns and operates fitness centers in a dozen Midwestern cities. The centers have done well, and the company is planning an international expansion by opening a new “supercenter” in the Toronto area. Personal Trainer’s president, Cassia Umi, hired an IT consultant, Susan Park, to help develop an information system for the new facility. During the project, Susan will work closely with Gray Lewis, who will manage the new operation. Background During requirements modeling for the new...
UPS COMPETES GLOBALLY WITH INFORMATION TECHNOLOGY United Parcel Service (UPS) started out in 1907 in a...
UPS COMPETES GLOBALLY WITH INFORMATION TECHNOLOGY United Parcel Service (UPS) started out in 1907 in a closet-sized basement office. Jim Casey and Claude Ryan—two teenagers from Seattle with two bicycles and one phone—promised the “best service and lowest rates.” UPS has used this formula successfully for more than a century to become the world’s largest ground and air package-delivery company. It’s a global enterprise with nearly 400,000 employees, 96,000 vehicles, and the world’s ninth largest airline. Today UPS delivers 16.3...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT