Service Department Charges and Activity Bases Middler Corporation, a manufacture

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 $92,140 635,775 57,600 103,680 3,400 8,650 7,200 8,100 ·The sector has 2,000 employees, of whom 50% are office employees All the office employees have been issued a smartphone, and 70% 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 230 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 Help desk Network center Electronic mail Smartphone support Service Charge Rate Per call Per device monitored Per user e-mail account Per smartphone issued

Explanation / Answer

Part 1 Category Budgeted Cost Activity Q Service Char Rate=Budgeted Cost/Activity q Help DesK 92140 3400 27.1 per call Network Center 635775 8650 73.5 per device monitored Electronic Mail 57600 7200 8 per user email account Smartphone Support 103680 8100 12.8 per smartphone issued Part 2 Category Rate as per 1 Actual Quantity Total Char=Rate*Activity Help DesK Char 27.1 700 18970 Network Center Char 73.5 930 68355 Electronic Mail Char 8 630 5040 Smartphone Support Char 12.8 1000 12800 Particular Quantity Remarks To be considered for Employee 2000 Office Employee 50% 1000 Smartphont Holder 1000 all office employee Smartphone Support Char Computer on network 700 70% of phone holder Network Center Char Email Account 630 90% of computer holder Electronic Mail Char Help Desk Call 700 1 call per computer holder Help DesK Char additional devices 230 Network Center Char

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