...Salem Telephone Company Case Study Salem Telephone Company Case Study Introduction Salem Data Service, SDS, is a vital asset to Salem Telephone Company. Even though there are losses occurring, SDS has begun to increase performance and losses have been decreasing over the last several months. Background Salem Telephone Company needed computer services to plan, control, and account for operations so it created Salem Data Service, SDC. Because Salem Telephone Company was a regulated utility, it needed to gain approval for this venture. This new subsidiary would be separate but wholly owned by Salem Telephone Company. Salem Data Service was allowed to compete with other computer service organizations, but it could not charge Salem Telephone Company more than $82,000. Both companies would pay each other for services rendered. Key Problems Revenue and cost data in the quarterly review revealed the lowest return on investment in seven years. Flores is reluctant to shut down or sell SDS, but feels that it is time to reassess SDS profitability. He has scheduled a meeting with Wu to discuss 3 possible scenarios. Alternatives Flores is contemplating asking Wu to estimate the effects on profit from increasing price to customers; not including Salem, reducing price, and increasing sales efforts. 1) Which expenses are variable and which are fixed with respect to revenue hours Fixed cost in respect to revenue hours: Rent ($8,000) Custodial services ($1,240) Computer...
Words: 613 - Pages: 3
...Salem Telephone Company Managerial Accounting Case Study 1: Salem Telephone Company 96122050 96122051 96122052 96122073 96122085 96122088 96122092 Group 1 Through our study of Salem Telephone Company (STC), we’re going to answer that if Salem Data Services (SDS) is really a profitable business to keep by using break-even point analysis. Before we come out the final solution, let’s discuss SDS’ accounting report step by step. First, we have to divide the various costs incurred in SDS into two types: variable costs and fixed costs. From Exhibit 2 we can see that only “Power” and “Operations: hourly personnel” are variable costs that have relation to the total revenue hours. Other expenses listed in Exhibit 2 are all fixed costs (Q1). Besides, we can calculate the unit variable costs per revenue hour as follows (Q2): January 1,546 7,896 9,442 329 28.70 February 1,485 7,584 9,069 316 28.70 March 1,697 8,664 10,361 361 28.70 Power Operations: hourly personnel Total variable costs Total revenue hours Variable costs per revenue hour Furthermore, by distinguish the variable costs and fixed costs, we can construct the contribution margin income statement for SDS at March level, assuming 205 hours for intracompany usage (Q3): Revenues Intracompany 82,000 Commercial 110,400 Total Revenues 192,400 Variable expenses (power + hourly personnel) 9,844 Contribution margin 182,556 Fixed expenses Rent 8,000 Custodial services 1,240 Computer leases 95,000 Maintenance 5,400 Depreciation...
Words: 340 - Pages: 2
...Managerial Accounting Case Study 1: Salem Telephone Company 96122050 96122051 96122052 96122073 96122085 96122088 96122092 Group 1 Through our study of Salem Telephone Company (STC), we’re going to answer that if Salem Data Services (SDS) is really a profitable business to keep by using break-even point analysis. Before we come out the final solution, let’s discuss SDS’ accounting report step by step. First, we have to divide the various costs incurred in SDS into two types: variable costs and fixed costs. From Exhibit 2 we can see that only “Power” and “Operations: hourly personnel” are variable costs that have relation to the total revenue hours. Other expenses listed in Exhibit 2 are all fixed costs (Q1). Besides, we can calculate the unit variable costs per revenue hour as follows (Q2): January 1,546 7,896 9,442 329 28.70 February 1,485 7,584 9,069 316 28.70 March 1,697 8,664 10,361 361 28.70 Power Operations: hourly personnel Total variable costs Total revenue hours Variable costs per revenue hour Furthermore, by distinguish the variable costs and fixed costs, we can construct the contribution margin income statement for SDS at March level, assuming 205 hours for intracompany usage (Q3): Revenues Intracompany 82,000 Commercial 110,400 Total Revenues 192,400 Variable expenses (power + hourly personnel) 9,844 Contribution margin 182,556 Fixed expenses Rent 8,000 Custodial services 1,240 Computer leases 95,000 Maintenance 5,400 Depreciation 26,180 Salaried staff...
Words: 778 - Pages: 4
...800 | $53,800 | 53,800 | TOTAL FC | $189,620 | $189,620 | $189,620 | 2) Cost per Revenue Hour for Variable Expenses: Revenue Hours> | January329 | February316 | March361 | Power | $1546 | $1485 | $1697 | Cost/Revenue Hr. | $4.70/hr. | $4.70/hr. | $4.70/hr. | Hourly Personnel | $7896 | $7584 | $8664 | Cost/Revenue Hr. | $24/hr. | $24/hr. | $24/hr. | Corporate Services | $15,424 | $15,359 | $15,236 | Cost/Revenue Hr. | $46.88 | $48.60 | $42.20 | Sales Promotions | $7,909 | $7,039 | $8,083 | Cost/Revenue Hr. | $24.04/hr. | $22.28/hr. | $22.39/hr. | 3) Contribution margin income statement for Salem Data Services Assumption: Intra company usage=205 hours; Commercial usage for March=138 hours Revenue Hours Intra company: 205 Commercial: 138 Total Revenue Hours: 343 Salem Data Services Income Statement | | Revenues | | Intra company sales | $82,000 | Commercial Sales | 110,400 | TOTAL REVENUE | $192,400 | | | LESS Variable Expenses | | Power | $1612.10 | Hourly Personnel | 8,232 | Corporate Services | 14,474.60 | Sales Promotions | 7,679.77 | TOTAL VARIABLE COSTS | $31,998.47 | CONTRIBUTION MARGIN | $160,401.53 | | | LESS FIXED EXPENSES...
Words: 928 - Pages: 4
...Case Study Salem Telephone Company Name: Due Date: 1. With respect to revenue hours, power costs and hourly personnel wages are variable expenses, because the cost per hour is constant for these two expenses. Rent, custodial services, computer leases, maintenance, depreciation of computer equipment, office equipment and fixtures, operations salaried staff, systems development and maintenance, administration, sales, sales promotions, and corporate services are fixed expenses. (Sales promotion had no connection with current level of works but depend on the estimation of future services and supports, while the amount of corporate services was based on total wages and current accounts. So they are not variable costs with respect to revenue hours.) 2. | January | February | March | Total revenue hours | 329 | 316 | 361 | Power expense | $1546 | $1485 | $1697 | Operations: hourly personnel | $7896 | $7584 | $8664 | Power expense per hour | $4.7/h | $4.7/h | $4.7/h | Hourly personnel wage per hour | $24/h | $24/h | $24/h | Total variable cost per hour | $28.7/h | $28.7/h | $28.7/h | Income Statement | | Revenue | | Intracompany sales | $82,000 | Commercial sales | 110,400 | Total revenue | $192,400 | Variable costs | (9,844.1) | Contribution margin | $182,555.9 | Fixed costs | (212,939) | Net income(loss) | ($30,383.1) | 3. Intracompany sales=205 h*$400/h=$82,000 Commercial sales=138h*$800/h=$110,400 Variable costs=$28...
Words: 574 - Pages: 3
... Topics/Case Descriptions Measuring Product Costs Case: Seligram, Inc.: Electronic Testing Operations Case Description: Explores the obsolescence of a cost system when technology changes. In particular, it asks students to increase the number of cost centers and allocation bases. The firm moves from a one-center, direct labor-hour system to a three-center, direct labor-hour and machine-hour systems. In addition, the case demonstrates how cost systems can induce subtle and not so subtle shifts in the strategy of the firm. In particular, we see how certain businesses are made to look inappropriately attractive or unattractive. Cost Behavior, Capacity Analysis and the Downward Demand Spiral Case: Bridgeton Industries: Automotive Component & Fabrication Plant Case Description: Bridgeton Industries was experiencing reduced sales. To become more competitive it introduced a classification procedure for products based upon their productivity and other factors. Products were classified into three groups: world class, potentially world class, and non-world class. The firm outsources the non-world class products. This outsourcing causes the costs on the remaining products to increase because some fixed costs associated with the outsourced products did not go away. These residual costs caused more products to become non-world class and hence candidates for outsourcing. The firm has entered the death spiral. Activity-Based Costing Case: Destin Brass...
Words: 1304 - Pages: 6
... Topics/Case Descriptions Measuring Product Costs Case: Seligram, Inc.: Electronic Testing Operations Case Description: Explores the obsolescence of a cost system when technology changes. In particular, it asks students to increase the number of cost centers and allocation bases. The firm moves from a one-center, direct labor-hour system to a three-center, direct labor-hour and machine-hour systems. In addition, the case demonstrates how cost systems can induce subtle and not so subtle shifts in the strategy of the firm. In particular, we see how certain businesses are made to look inappropriately attractive or unattractive. Cost Behavior, Capacity Analysis and the Downward Demand Spiral Case: Bridgeton Industries: Automotive Component & Fabrication Plant Case Description: Bridgeton Industries was experiencing reduced sales. To become more competitive it introduced a classification procedure for products based upon their productivity and other factors. Products were classified into three groups: world class, potentially world class, and non-world class. The firm outsources the non-world class products. This outsourcing causes the costs on the remaining products to increase because some fixed costs associated with the outsourced products did not go away. These residual costs caused more products to become non-world class and hence candidates for outsourcing. The firm has entered the death spiral. Activity-Based Costing Case: Destin Brass...
Words: 1304 - Pages: 6
... Topics/Case Descriptions Measuring Product Costs Case: Seligram, Inc.: Electronic Testing Operations Case Description: Explores the obsolescence of a cost system when technology changes. In particular, it asks students to increase the number of cost centers and allocation bases. The firm moves from a one-center, direct labor-hour system to a three-center, direct labor-hour and machine-hour systems. In addition, the case demonstrates how cost systems can induce subtle and not so subtle shifts in the strategy of the firm. In particular, we see how certain businesses are made to look inappropriately attractive or unattractive. Cost Behavior, Capacity Analysis and the Downward Demand Spiral Case: Bridgeton Industries: Automotive Component & Fabrication Plant Case Description: Bridgeton Industries was experiencing reduced sales. To become more competitive it introduced a classification procedure for products based upon their productivity and other factors. Products were classified into three groups: world class, potentially world class, and non-world class. The firm outsources the non-world class products. This outsourcing causes the costs on the remaining products to increase because some fixed costs associated with the outsourced products did not go away. These residual costs caused more products to become non-world class and hence candidates for outsourcing. The firm has entered the death spiral. Activity-Based Costing Case: Destin Brass...
Words: 1304 - Pages: 6
...Zero-Tolerance Team Feasibility Study: Lowering Drug Violations On Campus Kelsey L. Jones Feasibility Study: Lowering Drug Violations on Campus Technical Communications Joyce Gorgan March 26, 2012 Table of Contents Executive Summary....................................................................................................................4 Introduction.................................................................................................................................5 Research Methods.......................................................................................................................6 Results.........................................................................................................................................8 Criminal Background Check Process..........................................................................................8 Cost.................................................................................................................8 Effectiveness...................................................................................................9 Legality...........................................................................................................9 Undercover Police Officers.........................................................................................................9 Cost...................................................................................................
Words: 2963 - Pages: 12
...section may contain an inappropriate mixture of prose and timeline. | | |Please help convert this timeline into prose or, if necessary, a list. | While a student at the University of Texas at Austin in 1984, Michael Dell founded the company as PC's Limited with capital of $1000[4]. Operating from Michael Dell's off-campus dorm room at Dobie Center [1], the startup aimed to sell IBM PC-compatible computers built from stock components. Michael Dell started trading in the belief that by selling personal computer-systems directly to customers, PC's Limited could better understand customers' needs and provide the most effective computing solutions to meet those needs. Michael Dell dropped out of school in order to focus full-time on his fledgling business, after getting about $300,000 in expansion-capital from his family. In 1985, the company produced the first computer of its own design — the "Turbo PC" — which contained an Intel 8088-compatible processor running at a speed of 8 MHz. PC's Limited advertised the systems in national computer-magazines for sale directly to consumers, and custom-assembled each ordered unit according to a selection of options. This offered buyers prices lower than those of retail brands, but with greater convenience than assembling the components themselves. Although not the first company to use this model, PC's Limited became one of the first to succeed...
Words: 5908 - Pages: 24
...SOCIAL WELFARE AND NUTRITIOUS MEAL PROGRAMME DEPARTMENT CITIZEN’S CHARTER – 2011 CHAPTER - 1 INTRODUCTION The implementation of schemes for the welfare of women, children and aged is done by the Social Welfare and Nutritious Meal Programme Department through the Directorates of Social Welfare, Social Defence and the Integrated Child Development Services Scheme. This Department also functions as a nodal agency for various Social Security Programmes implemented through the Revenue Department. 2.The Directorate of Social Welfare implements a number of programmes for the welfare of women including the Marriage Assistance Schemes. The Directorate also runs Service Homes where the destitute and deserted women can stay with security and at the same time, pursue education and vocational training. Working Women‟s Hostels where women can stay at affordable rates are also run by the Directorate of Social Welfare. Training and self-employment of women are thrust areas and the large number of Women Co-operative Societies run by the Directorate provide avenues for women to be self-reliant. The welfare of the vulnerable group of transgenders and programmes specially designed for them are also under the purview of the Directorate of Social Welfare. 3. Two flagship schemes of the Social Welfare and Nutritious Meal Programme Department relate to nutrition security for children. Puratchi Thalaivar MGR Nutritious Meal Programme provides hot cooked meal to 54.80 lakh school children from Standard...
Words: 24068 - Pages: 97
...Tell Me Your Dreams by Sidney Sheldon BOOK ONE CHAPTER ONE Someone was following her. She had read about stalkers, but they belonged in a different, violent world. She had no idea who it could be, who would want to harm her. She was trying desperately hard not to panic, but lately her sleep had been filled with unbearable nightmares, and she had awakened each morning with a feeling of impending doom. Perhaps it's all in my imagination, Ashley Patterson thought. I'm working too hard. I need a vacation. She turned to study herself in her bedroom mirror. She was looking at the image of a woman in her late twenties, neatly dressed, with patrician features, a slim figure and intelligent, anxious brown eyes. There was a quiet elegance about her, a subtle attractiveness. Her dark hair fell softly to her shoulders. I hate my looks, Ashley thought. I'm too thin. I must start eating more. She walked into the kitchen and began to fix breakfast, forcing her mind to forget about the frightening thing that was happening, and concentrating on preparing a fluffy omelette. She turned on the coffeemaker and put a slice of bread in the toaster. Ten minutes later, everything was ready. Ashley placed the dishes on the table and sat down. She picked up a fork, stared at the food for a moment, then shook her head in despair. Fear had taken away her appetite. This can't go on, she thought angrily. Whoever he is, I won't let him do this to me. I won't. Ashley glanced at her watch. It was time to leave...
Words: 73172 - Pages: 293
...INTRODUCTION:- Any dispute is just like a Cancer. If it is resolved sooner, it is better for all the parties concerned to it. If it is not resolved at the beginning, it grows at the very fast rate and with time, it becomes very difficult to resolve it.As new issues emerges and conflicting situation flourish. In this way one dispute leads to another and new complexities arises thereby leading to multiplicity of proceedings. Therefore, it is always better to resolve it at the moment it rears its head. Therefore, it is necessary that the procedure of resolving it must be agreeable by both the parties. The preamble of the Constitution of India declares to “...... to secure all its citizen justice, liberty, equality and fraternity”. The justice granted to citizen is of social, economical and political. However, the mode of delivering the justice to the citizen of India poses so many questions. It is in this regard necessary to put the question that whether the present system of access to justice is satisfactorily fulfilling the constitutional goal? The present mode of access to justice in India is based on the adversarial legalism. This system is generally followed in the common law countries. In this mode of justice the State plays a neutral role and it is parties who are responsible for initiating and conducting litigation. However, any crime is considered as an offence against the State in which such proceeding is initiated. This mode of justice was adopted by the Britishers...
Words: 5429 - Pages: 22
...SAIL'S VOLUNTARY RETIREMENT SCHEME Case Code-HROB002 Published-2003 INTRODUCTION At a meeting of the board of directors in June 1999, the CEOs of Steel Authority of India's (SAIL) four plants - V. Gujral (Bhilai), S. B. Singh (Durgapur), B.K. Singh (Bokaro), and A.K. Singh (Rourkela) made their usual presentations on their performance projections. One after the other, they got up to describe how these units were going to post huge losses, once again, in the first quarter[1] of 1999-2000. After incurring a huge loss of Rs 15.74 billion in the financial year 1998-99 (the first in the last 12 years), the morale in the company was extremely low. The joke at SAIL's headquarters in Delhi was that the company's fortunes would change only if a VRS was offered to its CEOs - not just the workers. BACKGROUND NOTE |SAIL was the world's 10th largest and India's largest steel manufacturer with a 33% share in the domestic market. In |[pic][pi| |the financial year 1999-2000, the company generated revenues of Rs. 162.5 billion and incurred a net loss of Rs 17.2 |c] | |billion. Yet, as on February 23, 2001, SAIL had a market valuation of just Rs. 340.8 billion, a meager amount | | |considering the fact that the company owned four integrated and two special steel plants. | | |SAIL was formed in 1973 as a holding company of the government owned steel and associated input companies. In 1978, the| | |subsidiary companies...
Words: 11398 - Pages: 46
...7 Strategy...........................................................................................................................7 Financial Performance ...……………………………………………………………..13 Dell’s Evaluation……………………………………………………………………..15 Recommendation……………………………………………………………………..22 Conclusion…………………………………………………………………………….23 References…………………………………………………………………………….25 Abstract This case study examines the marketing strategy and innovation practiced by the Dell Computer Corporation IT details the history of the company which made its way in the industry by building custom configurations of personal computers. A major theme of this case is Dell’s build-to-order strategy which has been a success in marketing as well as an overall strategy in supply chains across the country. This case details how well Dell has cornered the personal computing home office market and also the manner in which it derives a substantial amount of its revenue from its small business clients. It also addresses potential problems in Dell’s strategic management and possible solutions to help them stay on top. Introduction History Dell was founded in 1984 by Michael S. Dell, a student at the University of Texas, who with $1,000 dollars in capital starting selling custom built computers for customers looking for a lower cost alternative to more mainstream systems. He worked out of his dormitory room, and would later drop out of school to pursue his...
Words: 6291 - Pages: 26
