1) Are the allocation bases suggested in the case "reasonable"? If not, how would you change them? Which of the two bases under discussion for the maintenance and repair cost center would you use? Why?

2) Should Ms. Conaway appy to the DPU for a rate increase? If so, for which products and approximately how much? If not , how should she go about eliminating the loss? (complete the tables below to help answer these questions)

3) After completion of the tables below, what else would you recommend to Ms. Conaway?

Complete the tables below: When allocating service center costs, allocate them by starting with the service center that uses the other service centers the least and end with the service center that uses the other service centers the most. In this case we will use the allocation order below (this determination is made by assumptions and is not explicitly given in the case). Step 1 Depreciation Step 2 Maintenance and Repairs Step 3 General & Admin Step 4 General cleaning & Upkeep Step 5 Information Technlolgy Profit by Cost Center: Base Charge Distribution Transmission Acquisition & Transfer Unregulated Services Total Revenues Direct Expenses Contribution $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Overhead Net Income $0.0 Calculate the Activity within each Cost Driver: Step 1 Step 2 Step 3 Step 4 Step 5 Sq. Ft. KWH Salary $'s Sq. Ft. IT Hours Electricity Distribution 50,000 Transmission 20,000 Acquisition and Transfer 30,000 Total Customer Support Commercial Energy Advisor 6,000 Business solutions 5,000 Construction Solutions 6,200 Building Operator Training 11,000 128,200 - $0.0 - - Allocation Statistics: Steps Accounts Allocation Unit Cost Pool Cost Driver Activity Rate 1 Depreciation 128,200 $0.00000 2 Maintenance and Repairs - #DIV/0! 3 General & Admin $0.0 #DIV/0! 4 General cleaning & Upkeep - #DIV/0! 5 Information Technlolgy - #DIV/0! $0.0 Allocated Costs: Revenue Generating cost Centers Direct Costs Indirect/overhead costs Total Costs Total Direct Costs Depreciation Maintenance & Repairs G&A Gen. Cleaning & Upkeep IT Total Full Cost Electricity Distribution $0.0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Transmission $0.0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Acquisition and Transfer $0.0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Total Electricity Costs $0.0 $0.0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Customer Support Commercial Energy Advisor $0.0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! Business solutions $0.0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! Construction Solutions $0.0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! Building Operator Training $0.0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! Total Cust. Supp. Costs $0.0 $0.0 $0.0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! Total $0.0 $0.0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Total $0.0 #DIV/0! #DIV/0! Cost Comparison: Full Cost Full Cost KWH Charged Cost Per KWH Difference Electricity Distribution #DIV/0! #DIV/0! #DIV/0! Transmission #DIV/0! #DIV/0! #DIV/0! Acquisition and Transfer #DIV/0! #DIV/0! #DIV/0! Total #DIV/0! A79:H111

PUT IN EXCEL SHEET PLEASE

HARBOR CITY ELECTRIC TEMPLETE CASE 1

Hide comments (1)