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Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses...

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
Activity Base
Budgeted Cost		 Budgeted Activity
Base Quantity
Help desk Number of calls $160,000 3,200
Network center Number of devices monitored 735,000 9,800
Electronic mail Number of user accounts 100,000 10,000
Handheld Technology support Number of handheld devices issued 124,600 8,900

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 5,200 employees, of whom 25% are office employees.

Almost all office employees (99%) have a computer on the network.

One hundred percent of the employees with a computer also have an e-mail account.

The average number of help desk calls for October was 1.2 calls per individual with a computer.

There are 600 additional printers, servers, and peripherals on the network beyond the personal computers.

All the nonoffice employees have been issued a handheld device.

a. Determine the service charge rate for the four CCS service categories for October.

CCS Service Category Service Charge Rate
Help desk $ Per call
Network center $ Per device monitored
Electronic mail $ Per user or e-mail account
Handheld technology $ Per device

b. Determine the charges to the COMM sector for the four CCS service categories for October.

October charges to the COMM sector
Help desk charge $
Network center charge $
Electronic mail charge $
Local voice support charge $

Solutions

Expert Solution

STATEMENT SHOWING ACTIVITY RATE OF ACTIVITY POOL
Activity Total Expected Activity
ACTIVITY COST POOL Measures Overheads Activity Rate
Hhelp Desk per call 160000 3200 50 per call
Network Center Per device 735,000 9,800 75 per device monitores
Electronic Mail Pere useer 100,000 10,000 10 per user
Handheld technology Per device 124,600 8,900 14 per device
Number of Employees 5200
office employees 1300
Non-Office employees 3900
Number of Computers (1300*99%) 1287
Number of Email account 1287
Number of handheld devices 3900
Number of devices monitored 1887
(1287+600)
Number of calls (1287*1.2) 1544.4
Activity cost:
Activity   Drivers Rates Activity cost
Hhelp Desk 1544.4 calls 50 77220
Network Center 1887 devices 75 141525
Electronic Mail 1287 accounts 10 12870
Handheld technology 3900 dvice 14 54600
Total activity cost 286215

ekkarill92 answered 1 year ago
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