ACCOUNTING
Warren, Reeve and Duchac
Financial Accounting
Managerial Accounting
Carl Warren, James M. Reeve, Jonathan E. Duchac
Chapter 24
EX 24-6 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 April. CCS Service Assumed Activity Category Activity Base Assumed Cost Base Quantity Help desk Number of calls $88,400 2,600 Network center Number of devices monitored 609,375 9,750 Electronic mail Number of user accounts 67,080 6,450 Local voice support Number of phone extensions 152,720 9,200
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 3,000 employees, of whom 40% are office employees.
• All the office employees have a phone,and 75% of them have a computer on the network.
• Ninety-five percent of the employees with a computer also have an e-mail account.
• The average number of help desk calls for April was 1.0 call per individual with a computer.
• There are 250 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 April.
b. Determine the charges to the COMM sector for the four CCS service categories for April.
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