MAII - Independent Underwriters Insurance Co. Review of...

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Independent Underwriters Insurance Co. Review of Systems Department Cost Allocation
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Management Practice Record Claims Finance Outside Total Cost Allocated 330,000 110,000 82,500 27,500 550,000 %Variance (Actual rate x Actual hour) -77.61% 49.77% 22.50% 18.52% The allocation base: Actual Computer Time used ( 60%, 20%, 15%, 5%)
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James' recommendation Record Claims Finance Outside System Total Hardware and other capacity-related costs (a) 45,000.00 75,000.00 22,500.00 7,500.00 5,000.00 155,000.00 Software development (b) 12,750.00 51,000.00 51,000.00 12,750.00 127,500.00 Operations Computer Related (c) 110,400.00 36,800.00 27,600.00 9,200.00 184,000.00 Input/output related (d) 15,800.00 55,300.00 3,950.00 3,950.00 79,000.00 183,950.00 218,100.00 105,050.00 33,400.00 5,000.00 545,500.00 % Variance with the actual amount incurred 1.00% 0.41% 1.32% 1.04% Remarks: ( a ) Budgeted Cost of Hardware and other capacity-related Cost x Percentage of utilization The difference between actual and budgeted hardware cost would remain with the
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MAII - Independent Underwriters Insurance Co. Review of...

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