Harris 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.
|
|
|
|
Assumed Activity |
|
CCS Service Category |
Activity Base |
Assumed Cost |
Base Quantity |
|
Help desk |
Number of calls |
$ 73,600 |
2,300 |
|
Network center |
Number of devices monitored |
614,250 |
9,450 |
|
Electronic mail |
Number of user accounts |
53,550 |
6,300 |
|
Local voice support |
Number of phone extensions |
127,238 |
8,775 |
One of the profit centers for Harris Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector:
- The sector has 4,000 employees, of whom 50% are office employees.
- All the office employees have a phone, and 90% of them have a computer on the network.
- Ninety percent of the employees with a computer also have an e mail account.
- The average number of help desk calls for October was 0.50 call per individual with a computer.
- There are 300 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.
b. Determine the charges to the COMM sector for the four CCS service categories for October.