Harold Corporation, a manufacturer of electronics and communications systems, us

Question

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 60% 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 250 additional printers, servers, and peripherals on the network beyond the personal computers. Determine the service charge rate for the four CCS service categories for April. Round your answers to two decimal places. Help desk Network center Electronic mail Local voice support Determine the charges to the COMM sector for the four CCS service categories for April. Help desk charge Network center charge Electronic mail charge Local voice support charge

Explanation / Answer

a CCS Service category Activity Base Budgeted Cost Budgeted Activity Base Qty Service Charge rate   Help Desk   No Of Calls         105,030                 2,700 $      38.90 Network Centre No of devices monitored         732,600                 9,900 $      74.00 Electronic mail No of user accounts           68,500                 6,850 $      10.00 Local Voice support   No of phone extensions         148,800                 9,300 $      16.00 b COMM sector details No of employees                          5,000 Office employees @60%                          3,000 No of Phone connections                          3,000 No of computers @70%=                          2,100 No of e-mails@95%                          1,995 No of help desk calls=                          2,100 No of devices monitored=250+2100=                          2,350 APR Charges to COMM sector CCS Service category Service Charge rate   Activity for Apr Allocate charge Help Desk                            38.90             2,100               81,690 Network Centre                          74.00             2,350             173,900 Electronic mail                          10.00             1,995               19,950 Local Voice support                            16.00             3,000               48,000

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