Reference no: EM132717792

Problem - 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 for August.

CCS Services	Cost Drivers	Budgeted Cost	Budgeted Quantity of Services
Help desk	Number of calls	$90,000	3,600
Network center	Number of devices	120,000	1,500
Electronic mail	Number of user accounts	160,000	5,000
Smartphone support	Number of smartphones issued	72,000	4,000

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

COMM has 2,500 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 for 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.

Required -

a. Compute the service allocation rate for each of CCS's services for August.

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