Assuming the company demand for service will average 205 hours per month, what level of commercial sales of computer use would be necessary to break even each month?
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Exhibit 1 Prestige Data Services Summary of Computer Utilization, First Quarter 2003 Revenue Hours January February March Intercompany 206 181 223 Commercial 123 135 138 Total revenue hours 329 316 361 Service hours 32 32 40 Available hours 223 164 143 Total hours 584 512 544 Exhibit 2 Prestige Data Services Summary Results of Operations, First Quarter 2003 January February March Revenues Intercompany sales $82,400 $72,400 $89,200 Commercial sales Computer use 98,400 108,000 110,400 Other 9,241 9,184 12,685 Total revenue $190,041 $189,584 $212,285 Expenses Space costs: Rent $8,000 $,000 $8,000 Custodial services 1,240 1,240 1,240 9,240 9,240 9,240 Equipment costs Computer leases 95,000 95,000 95,000 Maintenance 5,400 5,400 5,400 Depreciation: Computer equipment Office equipment and fixtures 25,500 25,500 25,500 680 680 680 Power 1,633 1,592 1,803 128,213 128,172 128,383 Wages and salaries Operations Systems development and maintenance 29,496 29,184 30,264 12,000 12,000 12,000 Administration 9,000 9,000 11,200 9,000 Sales 11,200 11,200 62,464/ 10,317 61,696 61,384 Materials 9,031 8,731 Sales promotions Corporate services Total expenses Net income (loss) 7,909 7,039 8,083 15,424 15,359 15,236 $231,513 $229,925 $233,723 $(41,472) $(40,341) $(21,438)