1. Business
  2. Accounting
  3. service department charges and activity bases middler corporation a manufacturer...

Question: service department charges and activity bases middler corporation a manufacturer...

Question details

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 $99,900 3,000
Network center Number of devices monitored 711,425 9,950
Electronic mail Number of user accounts 65,500 6,550
Smartphone support Number of smartphones issued 150,400 9,400

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 5,000 employees, of whom 30% are office employees.

• All the office employees have been issued a smartphone, and 90% 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 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.

CCS Service Category Service Charge Rate
Help desk $  
Network center $  
Electronic mail $  
Smartphone support $  

b. Determine the charges to the COMM sector for the four CCS service categories for October. Round your answers to the nearest dollar amount.

October charges to the COMM sector:
Help desk charge $
Network center charge $
Electronic mail charge $
Smartphone support charge $
Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution