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
Local voice support Number of phone extensions 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.
• All the office employees have a phone, and 96% of them 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 1.5 calls per individual
with a computer.
• There are 600 additional printers, servers, and peripherals on the network beyondthe personal computers.
a. Determine the service charge rate for the four CCS service categories for October.
b. Determine the charges to the COMM sector for the four CCS service categories for October.
Answer:
$160,000
3,200 calls
$735,000
9,800 devices
$100,000
10,000 accounts
$124,600
8,900 phone extensions
= $50 per call
= $75 per device monitored
= $10 per user or e-mail account
= $14 per phone extension
b. October charges to the COMM sector:
Help desk charge:
(5,200 employees × 25% × 96% × 1.5) × $50/call = $93,600
Network center charge:
[(5,200 employees × 25% × 96%) + 600] × $75/device = $138,600
Electronic mail:
(5,200 employees × 25% × 96% × 100%) × $10/user or e-mail account = $12,480
Local voice support:
(5,200 employees × 25%) × $14/phone extension = $18,200