I. SUMMARY OF THE CASE Prestige Telephone Company is a public utility business. Since it is operated as a public utility, it is subject to the regulations of the Public Service Commission, as such, the rates charged by Prestige Telephone Company for telephone service could not be changed without the approval of the Public Service Commission. The state Public Service Commission had encouraged all public utilities under its jurisdiction to seek new sources of revenue and profits as a step toward deregulation
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PRESTIGE TELEPHONE COMPANY . Assignment The purpose of this case is to give you an opportunity to exercise your CVP analysis skills in a mixed non-profit/profit service context. As the controller of Prestige Telephone Company, you have been asked for an analyses of the 1997 first-quarter operating results for Prestige Data Services (a fully-owned subsidiary) and possible alternative courses of action to improve performance of Prestige Data in the future. Write a memo to Mr. Rowe (President
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Case Analysis: Prestige Telephone Company Liam Hennessy, Xinyi Zhang, Yuan Chai, and Anthony Saba 1. Reasons for Continuing Losses Prestige Data Services’ main problem is that they have too many available hours that are not generating any revenue. In the first quarter of 2003, they have an average of 176 available hours per month of available hours. Its operations exact a huge amount of fixed costs to cover. If they could find more commercial customers for the available capacity, they could
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Prestige Telephone- Case #2 1. I would present an alternative accounting statement to Prestige Data Services by adjusting the net income due to the fixed expenses of rent and custodial services that are provided in the original Prestige Data Services Summary Results of Operations, First Quarter 2003. Although it appears that the company is suffering great losses, it is necessary to remove the fixed, sunk costs in order to get the adjusted net income. These sunk costs are costless to Prestige Telephone
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1. Prestige Data Services is quite a problem to Prestige Telephone.This is because as it can be seen from the data, the Prestige Data Services is spending more than it is earning as it can be derived from the difference between total expenditure and total revenue. Further, the period that it had been allocated to prove profitable had already been exceeded and no worthy results were available which means even if the subsidiary was added more time little progress could be made. This is supported by
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Prestige Telephone (Case #2) Due at the beginning of the first class after Thanksgiving break (12/1 or 12/2). Target length is two pages of discussion supplemented by tables (as needed). YOU MUST TYPE THIS – DO NOT HAND IN A HANDWRITTEN PROJECT! Modified / revised case questions (use these in conjunction with the questions in the case). 1. Read the case question as presented (page 3 of the case). Alternative interpretations for this question are, “Does Prestige Data Services cost Prestige
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Student No: 9501133724 1. Prestige data service is a new company there will be a transient period and it will need time to gain market share. When we looked the financial result of the firms, the company looks relatively losing money. a. If you check the excel sheet Q1-Cost Based Calculation which is showing Prestige data company currently pays expenses, after closing the Data company, prestige phone company will have to pay these expenses because some of the services still going on and there
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Text Preview I)Appraise the results of operations of Prestige Data Service. Is the subsidiary really a problem to Prestige Telephone Company? Consider carefully the differences between reported costs and cost relevant for decisions that Daniel Rowe is considering. 1.The prestige Data Services grew from the needs of the Prestige Telephone Company to meet their needs of data handling at the time but the problem now is that the company is still operating at a loss. But is that a problem for the parent
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Introduction * Pestige Data Services (PDS) was a subsidiary of PrestigeTelephone (PT) Company.PDS -Data processing for the telephone companies & soldcomputer services to other companies. * Yet to experience profit. * Manager -More time required for business to become profitable. * President -Reduce the drain in company resources. Objectives * Analyze the results of operations. * Understand the economics of a business. * Forecast the potential change in income
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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 in operation the subsidiary has been unprofitable. Case Question #1 Assuming
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