Service Department Charges and Activity Bases Harold Corporation, a manufacturer
ID: 2476558 • 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.
One of the profit centers for Harold Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector:
The sector has 5,000 employees, of whom 30% are office employees.
All the office employees have a phone, and 70% of them have a computer on the network.
95 percent of the employees with a computer also have an e-mail account.
The average number of help desk calls for April was 1 call per individual with a computer.
There are 290 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 April. Round your answers to two decimal places.
b. Determine the charges to the COMM sector for the four CCS service categories for April.
CCS ServiceCategory
Activity Base
Budgeted Cost Budgeted Activity
Base Quantity Help desk Number of calls $153,720 3,600 Network center Number of devices monitored 517,725 8,850 Electronic mail Number of user accounts 61,500 6,150 Local voice support Number of phone extensions 132,800 8,300
Explanation / Answer
a)
b)
Number of activity drivers for the Communication Systems (COMM) sector:
CCS servcice Category Activity base Budgeted Cost Budgeted Activity based Quantity Activity rate Help Desk Number of calls 153720 3600 42.7 number of calls Network Centre Number of devices monitored 517725 8850 58.5 Number of devices monitored Electronic Mail Number of user accounts 61500 6150 10 Number of user accounts Local Voice Support number of phone extensions 132800 8300 16 number of phone extensionsRelated Questions
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