Salem Telephone Co Case Study #2 Overview: Salem Telephone Company (STC) is a telephone company who is regulated by the state Public Service Commission. The state Public Service Commission encouraged public utilities under its jurisdiction to seek new sources of revenue and profits. This would reduce the need for rate increase that higher costs would otherwise bring. The company formed an agreement with the state Public Service Commission to create a subsidiary. Thus Salem Data Services (SDS)
Words: 1387 - Pages: 6
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
Words: 340 - Pages: 2
Case Study Analysis: Salem Telephone Company Contents Summary 2 Analysis 2 Questions 3 Recommendations 5 Works Cited 6 Summary In 2000, Peter Flores, president of Salem Telephone Company (STC) told the Public Service Commission that a profitable computer service subsidiary would reduce pressure for telephone rate increases. Once approval was received from Public Service Commission, STC, a regulated public utility, established Salem Data Services (SDS) in
Words: 1092 - Pages: 5
Salem Telephone Company Case Study 1. Variable Expenses with respect to revenue hours: Power expense, hourly personnel salaries expense. Fixed expenses with respect to revenue hours: Rent, custodial services, computer leases, maintenance, depreciation of computer equipment and office equipment and fixtures, operations salaried staff, systems development and maintenance, administration, and sales, sales promotions, corporate services. 2. Units: dollars per hour January February March Power
Words: 302 - Pages: 2
1. “Revenues hours” represent the key activity that drives cost at Salem Data Services. Which expenses in exhibit 2 are variable with respect to revenue hours? Which expenses are fixed with respect to revenue hours? Variable: * Power * Operations: hourly personnel Fixed: * Rent * Custodial Services * Computer Leases * Maintenance * Depreciation: Computer Equipment * Depreciation: Office equipment and fixtures * Operations: salaried staff * Systems
Words: 771 - Pages: 4
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 | | |
Words: 928 - Pages: 4
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
Words: 995 - Pages: 4
Salem Telephone Case 1) In my opinion the expenses that are variable with respect to revenue hours at Salem Data Services are Power, Hourly personnel, and Sales promotion. I believe these expenses are variable because they change with revenue. Corporate services is a mixed cost and there is not enough information to ascertain the portion that is variable. The fixed expenses with respect to revenue include, Space costs, Equipment costs, depreciation expense, Salaried staff, system development
Words: 1002 - Pages: 5
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
Words: 778 - Pages: 4
Salem Telephone Company Case No. 9-104-086 Group #4 John Pipkin Resean Crawley Chan Srinivasa Brian Hamilton Question 1 The fixed cost associated with Salem Data Services are: Item Expenses Space cost: Rent Custodial services Equipment costs Computer leases Maintenance Depreciation: Computer equipment Office equipment and fixtures Wages and salaries Operations: salaried staff Systems development and maintenance Administration Sales Sales promotion Corporate services Total January February March
Words: 1405 - Pages: 6
