Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bonita Informatics provides data processing services to small businesses in the Northeast. For years, the company has allocated the cost of the data storage department

Bonita Informatics provides data processing services to small businesses in the Northeast. For years, the company has allocated the cost of the data storage department using the number of tape mounts (how many times a data tape is loaded onto the computer's tape drive). This rate was tied cosely to direct labor usage, since the more tapes that were mounted, the more operators that were needed to mount them. Under the current system, a customer is charged $1.75 each time a tape is mounted.Three months ago, the company implemented a new data storage system that uses an automated tape library. As a result, operators are no longer needed to mount the tapes. Some data that is used only temporarily is stored on a computer disk and never transferred to tape. With the new system, the department's payroll has dropped from 20 operators to 3.Emma Davis, manager of the data center, believes that the new system's costs are more the result of data storage than of number of tape mounts. She has gathered the following information on the operation of the storage system, which is expected to cost $397,621 per year to operate.CustomerGigabytes ofStorageNumber of Tape MountsDale39.25469.388Matthews53.721142,392Johnson8505,072Flowers191,972Daniel 19,7628,338Total 113,606227,212Calculate the activity cost rate for the data storage department using the number of tape mounts as the activity driver (round answer to 2 decimals places, e.g.,15.25.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

11th Edition

978-0132568968, 9780132568968

More Books

Students also viewed these Accounting questions

Question

How much cash does and will the company have?

Answered: 1 week ago

Question

Famous theory poverty and un british rule in India?

Answered: 1 week ago

Question

The Unicef was awarded the Nobel peace prize in the year........?

Answered: 1 week ago

Question

Who heads the council of ministers?

Answered: 1 week ago

Question

Who Coined and used the ward non aligned first?

Answered: 1 week ago