Salem Telephone Company Case
Autor: zimmermn • October 5, 2012 • Essay • 429 Words (2 Pages) • 1,579 Views
Salem Telephone Company Case
1. In respect to revenue hours, the variable expenses are power and hourly personnel. The fixed expenses are: rent costs, custodial costs, computer leases, maintenance costs, depreciation expenses, the salaried staff, development and maintenance systems wages, administration wages, sales people wages, corporate services, and sales promotion.
Sales promotion is not related to the current level of work, but rather determined as estimates by management. Therefore, we considered sales promotion to be a fixed cost until managers deem necessary to change their estimation.
2.
Power:
Power = $4.70 per revenue hour
Hourly Personnel:
Hourly Personnel = $24 per revenue hour
Total Variable Cost per Unit = 28.70
Salem Data Services
Contribution Margin Income Statement
For First Quarter, 2004
Revenues:
Intracompany Sales $82,000
Commercial Sales 110,400
Total Revenues 192,400
Variable Costs:
Power 1,612.10
Hourly Personnel 8,232.00
Total Variable Costs: 9,844.10 Contribution Margin 182,555.90
Fixed Costs:
Rent
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