Service department charges and activity bases Harold Corporation, a manufacturer
ID: 2386162 • Letter: S
Question
Service department charges and activity bases
Harold 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 April.
CCS Service
Category
Activity Base
Assumed Cost
Assumed Activity
Base Quantity
Help desk
Number of calls
$105,570
2,700
Network center
Number of devices monitored
700,350
10,150
Electronic mail
Number of user accounts
85,200
7,100
Local voice support
Number of phone extensions
182,400
9,500
One of the profit centers for Harold Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector:
April charges to the COMM sector:
Help desk charge:
$
Network center charge:
$
Electronic mail:
$
Local voice support:
$
CCS Service
Category
Activity Base
Assumed Cost
Assumed Activity
Base Quantity
Help desk
Number of calls
$105,570
2,700
Network center
Number of devices monitored
700,350
10,150
Electronic mail
Number of user accounts
85,200
7,100
Local voice support
Number of phone extensions
182,400
9,500
Explanation / Answer
ANSWER a. Help desk: = $34 per call Network center: = $62.50 per device monitored Electronic mail: = $10.40 per e-mail account Local voice support: = $16.60 per phone extension b. April charges to the COMM sector: Help desk charge: (3,000 employees
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