Reference no: EM132520834

Varney corporation, a manufacturer of electronics and communications systems, allocates Computing and Communications Services Department (CCS) costs to profit centers. The following table lists the types of services and cost drivers for each service. The table also includes the budgeted cost and quantity for each service in August.

CCS Services                Cost Drivers Budgeted cost                  Budgeted                  Quantity of Services

Help desk                              Number of calls                          $90,000                        3600

Network Center                      Number of devices                      120,000                          1500

Electronic mail                     Number of user accounts                 160,0000                      5000

Smartphone support                 Number of smartphones issued       72,000                       4000

One of the profit centers for Varney Corporation is the Communication Systems (COMM) division. Assume the following information for COMM:

1. COMM has 2500 employees of whom 20% are office employees.
2. All of the office employees have been issued a smartphone, and 95% of them have a computer on the network.
3. One hundred percent of the employees with a computer also have an email account.
4. The average number of help desk calls or August was 0.6 call per individual with a computer.
5. There are 400 additional printers, servers, and peripherals on the network beyond the personal computers.

Question a. Compute the service allocation rate for each of CC's services in August

Question b. Compute the allocation of CCS services to COMM for August