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 $55,660 2,200 Network center Number of devices monitored 668,100 10,200 Electronic mail Number of user accounts 57,500 5,750 Handheld technology support Number of handheld devices issued 153,600 9,600 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 1,000 employees, of whom 50% are office employees. Almost all office employees (70%) 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 calls per individual with a computer. There are 280 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. Round your answers to two decimal places. b. Determine the charges to the COMM sector for the four CCS service categories for October.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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 | $55,660 | 2,200 | ||
| Network center | Number of devices monitored | 668,100 | 10,200 | ||
| Electronic mail | Number of user accounts | 57,500 | 5,750 | ||
| Handheld technology support | Number of handheld devices issued | 153,600 | 9,600 |
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 1,000 employees, of whom 50% are office employees.
- Almost all office employees (70%) 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 calls per individual with a computer.
- There are 280 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. Round your answers to two decimal places.
b. Determine the charges to the COMM sector for the four CCS service categories for October.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
