Riverbend Telephone Company has determined that they need a new maintenance truck and crew. Looking at the options they obtained 4 bids from truck dealers. They are expecting the truck to have a working life of five years. We looked at both options and believe that purchasing a new truck is the most cost effective when looking at keeping the truck for five years. The best offer for a lease is $7‚200 a year with a total present value of $36‚000. The best offer for purchasing a truck is $24
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1.) VARIABLE EXPENSES - Power - Operations (hourly personnel) FIXED EXPENSES - Rent - Custodial services - Computer leases - Maintenance - Depreciation - Operations (salaried staff) - Systems development and maintenance - Administration - Sales - Sales promotion - Corporate services 2.) VARIABLE EXPENSES: COST/HOUR JAN. FEB. MAR. Power: 4.7 4.7 4.7 Operations (hourly personnel): 24 24 24 TOTAL: 28.7 28.7 28.7 3.) CONTRIBUTION MARGIN INCOME STATEMENT
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Sales Fixed cost10 Sales promotion Fixed cost11 Corporate services Fixed cost11 1 The rent is a fixed cost because SDS has to pay the rent at Salem Telephone independent how many hours they are selling. That means even if SDS sell nothing the rent has to be paid. 2 The custodial services are fixed cost because they depend on Salem Telephone ’s estimated annual cost per square foot and so they are independent from the revenue of SDS. 3 The computer equipment is a fixed cost due to the fact
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Salem telephone case 1. ”Revenue hours” represent the key activity that drives costs at Salem Data Service . Which expenses in Exhibit 2 are variable with respect to revenue hours? Which expenses are fixed with respect to revenue hours? A : Variable costs : The power‚ hourly personal. Fixed costs : The rent‚ custodial service‚ computer leases‚ maintenance‚ computer equipment‚ office equipment and fixtures‚ salaried staff‚ system development and maintenance‚ administration‚ sales promotion
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Introduction Peter Flores‚ president of Salem Telephone Company (STC) informed the Public Service Commission “that a profitable computer service Subsidiary would reduce pressure for the telephone rate increase.” And a result‚ Salem Data Services (SDS) was established. In 2003‚ SDS has “yet to experience a profitable month” and this induced the meeting between Peter Flores and Cynthia Wu‚ manager of SDS in April 2004. Flores and Wu held different views in regards to SDS; Flores felt SDS was draining
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Salem Telephone Data Corp Executive Summary The analysis of the 2004 first quarter reports‚ which include the Summary of Computer Utilization and Summary Results of Operation‚ if is clear that the Data Services division needs to be scrutinized to understand why they continue to operate at a loss. The key areas that need to be addressed are: * Current utilization of computer usage hours * The consistent negative results of the operations * Determine if some of the fixed costs can be
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1697/361=4.7 8664/361=24 =24+4.7=28.7 3. Create a contribution margin income statement for Salem Data Services; Assume that intra company usage is 205 hours‚ Assume commercial usage is at the March Level. Revenue Variable costs Contribution Margin Fixed Costs Operating Income (loss) From the case we know that intracompany work was billed at $400 per hour‚ and commercial sales were billed at $800 per hour. Commercial 138*$800=$110‚400 138*$28.70=$3960.60
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Hearts and Minds in War of Plagiarism Summary In Scott Jaschiks’ book titled “Winning Hearts and Minds in War on Plagiarism‚” Jaschik describes the issue of first-year English students plagiarizing work and the numerous faculty members’ solutions to solve plagiarizing. Teachers‚ like North Carolina State University professor Kate Hagopian‚ are working with first-year English students to teach students academic integrity and to understand why students plagiarize. Teachers have researched the
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1.0 INTRODUCTION 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 perform data processing for the telephone company and to sell computer services to other companies and organizations. The company was opened to bring the additional revenue in order to offset the increases of telephone rate. Throughout two years of being in operation the subsidiary has been unprofitable
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SALEM TELEPHONE COMPANY Professor William J. Bruns‚ Jr. & Julie Hertenstein Introduction Accounting is not always a black or white subject; there are many variables to consider when making a business decision. Looking past the numbers and being able to look at the larger picture will determine whether you will be an average manager or a great manager. Background Facing declining profits‚ Salem Telephone Company (STC) is evaluating the future of its subsidiary‚ Salem Data
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