Case Study – Prestige Telephone Co. Company Profile Prestige Data Services is a subsidiary of Prestige Telephone Company‚ a public utility. They are a computer data service company that does data processing for the parent company in order to sell computer services. The company was opened in order to bring in additional revenue in order to offset increases in telephone rate increases. Throughout the three years of being
Premium Costs Variable cost Revenue
Case Study Prestige Telephone Co. CLASSIFICATION OF COSTS Jan Fixed costs: Space rent Custodial services Computer leases Maintenance Depreciation Power Wages: Operations Systems development Admnistration Sales Sales promotions Total fixed costs I Corporate services Total fixed costs II Variable cost per hour: Power Wages operations Materials Variable unit cost per hour 8.000 1.240 95.000 5.400 26.180 Feb 8.000 1.240 95.000 5.400 26.180 Mar 8.000 1.240 95.000 5.400 26.180 Average 8.000 1.240
Premium Variable cost Costs Revenue
The current situation of Prestige Data Service revealed a few problems‚ which had mis-presented the performance of Prestige Data Service and misled the manager’s decision making. First of all‚ the current accounting report did not reveal the real contribution made by Prestige Data Service to its parent company. According to the restriction of the state Public Service Commission‚ the average monthly charge for service by the subsidiary to the parent not exceed $82‚000; therefore the intercompany
Premium Electric charge Costs Economics
Estimate the effect on income of each of the options Rowe has suggested if Bradley estimates as follows: a. Increasing the price to commercial customers to $1‚000 per hour would reduce demand by 30 %. Ans : - It is common to business manager in a business unit to adjust different variables (fixed cost‚ variable cost and price strategy) to maximize the bottom-line or top-line to either maximize profit or minimize the operation cost. Provided the data as below‚ 3 variable costs indentified‚ they
Premium Costs Variable cost Income statement
The following questions are intended to guide you in the identification of important case issues (these are similar to the assignment questions at the end of the case). 1) Identify which of Prestige Data Services’ costs are variable‚ fixed‚ or mixed (recall that for a mixed cost‚ total costs = fixed costs + (variable cost per unit of cost driver x units of cost driver)). For variable costs‚ estimate variable costs per unit of cost driver (note that the cost driver may not be the same for every
Premium Costs Variable cost
| Prestige Data Service 2010 SUMMER Executive Summary To assist Prestige Telephone Company on making the decision of continue its subsidiary or not‚ this report provides an analysis of Prestige Data Service (the subsidiary) on the status quo revenues and costs‚ a prediction on its break even situation‚ as well as possible options to increase profit. The report has its limitations due to insufficient detailed information on both other revenues and variable costs of Prestige Data Service
Premium Costs Variable cost Fixed cost
PRESTIGE TELEPHONE COMPANY 1.Identify the costs that are relevant to the analysis to discontinue Prestige Data Services: Relevant costs in the analysis by Prestige Telephone Company decision to discontinue Prestige Data Services include: fixed costs which must be absorbed by the parent company (Prestige Telephone) upon shutdown; outstanding Prestige Data Services debts; costs of retraining retained employees; costs associated with outsourcing data services previously provided by Prestige Data
Premium Revenue Income statement Costs
Prestige Telephone Company I. Case Background Prestige Data Services (PDS)‚ a subsidiary of Prestige Telephone Company (PTC)‚ has been experiencing bottom line losses for the two years it has been operating since 1995. The subsidiary has been performing all the data processing for the telephone company and selling computer services to other companies and organizations. Susan Bradley‚ the subsidiary manager was preparing for a meeting with Daniel Rowe‚ president of Prestige Telephone
Premium Cost Costs Contribution margin
Prestige Telephone Company Scott Johnson‚ Nicole Phillips‚ Ashton Shuler‚ & Brandy Watts February 25th‚ 2014 Group Contributions Responded to all texts‚ discussion boards‚ and emails Participated in online chat and conference call Answered question 3 Provided the framework of how the case would be set up Suggested new ideas for later projects on how to discuss our topic Responded to all texts‚ discussion boards‚ and emails Participated in online chat and conference call Answered
Premium Variable cost Contribution margin Costs
Summary Prestige Data Services is a subsidiary of Prestige Telephone Company‚ designed to perform data processing for the telephone company and also to sell computer services to other companies and organizations. The subsidiary started operations in 1995 and has yet to experience a profitable month and by the end of 1996 its income was low enough to necessitate a report to shareholders. Mrs. Bradley thinks the company just needs more time while Mr. Rowe feels it is time to reassess Prestige Data
Premium Variable cost Cost Costs