Question

Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge proft 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 Budgeted Activity Base Quantity Categony Activity Base Number of calls Number of devices monitored Number of user accounts Budgeted Cost Help desk $113,620 635,800 72,000 140,800 3,800 9,350 7,200 8,800 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: The sector has 3,000 employees, of whom 40% are office employees. An the office employees have been issued a smartphone, and 80% 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 260 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 Previous Next Check My Work

Answer 1

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Answer a)
			i	ii	iii=i/ii
	Category	Activity base	Budgeted cost	Budgeted activity base quantity	Service charge per unit
	Help desk	Number of call	113620	3800	$          29.90
	Network center	Number of device monitoring	635800	9350	$          68.00
	Electronic mail	Number of user account	72000	7200	$          10.00
	Smartphone support	number of smartphones issue	140800	8800	$          16.00
	CCS service category	Service charge rate
	Help desk	$                                             29.90	per call
	Network center	$                                             68.00	per divice monitoring
	Electronic mail	$                                             10.00	per user or e-mail account
	Smartphone support	$                                             16.00	per smartphones issued
Answer b)
	Computation of charges for COMM sector
	We have to first compute activity base for COMM sector
	Given that-
	Total number of employee		3000
	Office employee =3000*40%		1200
	Number of smart phone issued =		1200
	Computer on network =1200*80%		960
	Number of user account = 960*90%		864
	Number of call =		960
	Number of device monitored		260
	October charges to COMM
		Service charge rate	Unit comsumed	Cost
	Help desk	29.9	960	28704
	Network center	68	260	17680
	Electronic mail	10	864	8640
	Smartphone support	16	1200	19200
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