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:
- COMM has 2500 employees of whom 20% are office employees.
- All of the office employees have been issued a smartphone, and 95% of them have a computer on the network.
- One hundred percent of the employees with a computer also have an email account.
- The average number of help desk calls or August was 0.6 call per individual with a computer.
- 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