Call Centre Services (CCS) operates two divisions: a call centre that answers incoming customer service calls on behalf of its clients and a telemarketing operation that makes outgoing sales calls to seek new business for its clients. Each CCS operator can handle on average about 6,000 calls per year.

Although staff are allocated to one division or the other, when there is a high volume of incoming calls, sales staff from the telemarketing division assist customer service staff in the call centre division. This is a result of a current recruitment “freeze.”

The finance department has produced the information shown below.

What conclusions can you draw about the performance of each of the two divisions?

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Number of calls Fee per call Call Centre Telemarketing Total 70,000 $5 25,000 $10 350,000 250,000 $600,000 Revenue Less expenses Staff costs: 10 @ $15,000 per year; 5 @ $22,000 per year 150,000 110,000 260,000 Lease costs equipment (shared 50/50) 20,000 20,000 40,000 Rent (shared in proportion to staffing: 2/3, 1/3) 80,000 40,000 120,000 Telephone call charges Total expenses Operating profit 20,000 20,000 250,000 190,000 440,000 $100,000 $60,000 $160,000