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Unformatted text preview: 1. In Exhibit 2, Salem Data Services Summary Results of Operations, First Quarter 2004, the fixed costs include space costs (rent and 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 and corporate service. Variable costs are power and hourly personnel operation wages and salaries. 2. Cost per revenue hour January February March Power $1,456/329=$4.70 $1,485/316=$4.70 $1,697/361=$4.70 Hourly personnel operations wages and salaries $7,896/329=$24 $7,584/316=$24 $8,664/361=$24 3. Contribution margin income statement for Salem Data Services Revenues Intracompany sales ($400*205 hrs) 82,000 Commercial sales 110,400 Total revenue 192,400 Variable Costs Equipment costs Power ($4.70*205 hrs) 963.5 Wages and salaries Operations: hourly personnel ($24*205 hrs) 4,920 Contribution margin 186,517 Fixed Costs Space costs Rent 8,000 Custodial services 1,240 Equipment costs Computer leases 95,000 Maintenance 5,400 Depreciation: Computer equipment 25,500 Office equipment and fixtures 680 Wages and salaries Operations: salaried staff 21,600 Systems development and maintenance 12,000 Administration 9,000 Sales 11,200 Sales promotion 8,083 Corporate services 15,236.00 Net income-26,423 4. Break-even = Fixed Cost /Contribution Margin per Unit....
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