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 $

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 10E: Support department cost allocation comparison Refer to your answers to Exercises 7-9. Compare the...

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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	$

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