Service Department Charges and Activity Bases Middler Corporation, a manufacture
ID: 2517187 • Letter: S
Question
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 Help desk Network center Electronic mail Smartphone support Number of smartphones issued One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: Budgeted Activity Base Quantity Activity Base Number of calls Number of devices monitored Number of user accounts Budgeted Cost S56,760 682,550 63,000 140,800 2,200 9,350 6,300 8,800 * The sector has 5,000 employees, of whom 40% are office employees. All the office employees have been issued a smartphone, 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 October was 1 call per individual with a computer . There are 290 additional printers, servers, and peripherals on the network beyond the personal computers.Explanation / Answer
Answer:
A)
Determine the service charge rate for the four CCS service categories for October.
CCS Service Category
Service
rate
0
Help desk
25.8
Per cell
Network center
73
Per Device
Monitored
Electronic mail
10
Per User
Account
Local voice support
16
Per Phone
Extension
0
Working
CCS Service Category
Activity
based
Budgeted cost
Budgeted
Quantity
Service
rate
A
B
C=A/B
Help desk
No Of cell
56760
2200
25.8
Per cell
Network center
No of Device
Monitored
682550
9350
73.0
Per Device
Monitored
Electronic mail
No of User
Account
63000
6300
10.0
Per User
Account
Local voice support
No of Phone
Extension
140800
8800
16.0
Per Phone
Extension
___________________________________________-
b)
Determine the charges to the COMM sector for the four CCS service categories for October.
Particular
Quantity
Remarks
To be considered for
Employee
5000
Office Employee 40%
2000
Smartphont Holder
2000
all office employee
Smartphone Support Char
Computer on network
1400
70% of phone holder
Network Center Char
Email Account
1330
95% of computer holder
Electronic Mail Char
Help Desk Call
1400
1 call per computer holder
Help DesK Char
additional devices
290
Network Center Char
Category
Rate as
calculated above
Actual Quantity
Total Char=Rate*Activity
A
B
C=A*B
Help DesK Char
25.8
1400
36120
Network Center Char
73
1690
68355
Electronic Mail Char
10
1330
13300
Smartphone Support Char
16
2000
32000
CCS Service Category
Service
rate
0
Help desk
25.8
Per cell
Network center
73
Per Device
Monitored
Electronic mail
10
Per User
Account
Local voice support
16
Per Phone
Extension
0
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