ge c n to view additional Samson currently sends monthly bills to its customers via the postal service Because of a concem for the environment and recent increases in postal rates, Samson management is considering offering paperless billing. In addition billing will save energy and water (through reduced paper needs, waste disposal, and transportation needs). While Samson would like to switch to 100% paperless billing, many of its customers are not comfortable with paperless billing or may not have online access, so the paper billing option will remain regardless of whether or not Samson adopts a paperless billing system. an option to its customers for to saving printing, paper, and postal costs, paperless Calculate the variab t per bill mailed unde Assume that the con hat 35% of the maili ess billing system)? stomer ystem The cost of the paperless billing system would be $142,200 per quarter with no naiahla nantn alaen the enetnof the entom.ase.heoalasiee of the alaslen and the r lict or entor anu n and transportation needs). While Samson would like to switch to 100% paperless billing, many of its customers are not comfortable with paperless billing or may not have online access, so the paper billing option will remain regardless of whether or not Samson adopts a paperless billing system. b CAncodcinOCDL ConnLndnd.naannaLuinaanlanan nLun.ifaun The cost of the paperless billing system would be $142,200 per quarter with no de variable costs since the costs of the system are the salaries of the clerks and the cost of leasing the computer system. The paperless billing system being proposed would be able to handle up to 760,000 bills per quarter (more than 760,000 bills per n quarter would require a different computer system and is outside the scope of the lin current situation at Samson). ment is a p quart s for t - X Data Table n to view ad The cost data are as follows: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Calculate the Total paper, toner, printer S 592,500 S 600,000 $ 750,000 $ 610,000 t per bill mail maintenance, and postage costs Assume that hat 35% of th less billing s Total number of bills mailed choos be sur 475,000 700,000 495,000 500,000 Calculate the variable cost per bill mailed under the current paper-based billing system. Use the high-low method Assume that the company projects that it will have a total of 620,000 bills to mail in the upcoming quarter. If enough customers choose the paperless billing option so that 35% of the mailings can be converted to paperless, how much would the company save from the paperless billing system (be sure to consider the cost of the paperless billing system)? What if only 30% of the mailings are converted to the paperless option (assume a total of 620,000 bills)? Should the company still offer the paperless billing system? Explain your rationale. 1. 2. de 3. r e Samson Entertainment is a provider of cable, Internet, and on-demand video services Samson has gathered its cost data for the past year by quarler for paper, toner cartridges, printer maintenance costs, and postage costs for the billing department (Click the icon to view the cost data.) i (Click the icon to view additional information.) Read the requirements Requirement 1. Calculate the variable cost per bill mailed under the current paper-based billing system. Use the high-low method. The variable cost per bill mailed under the current paper-based billing system is S Requirement 2. Assume that the company projects that it will have a total of 620,000 bills to mail in the upcoming quarter. If enough customers choose the paperless billing option so that 35% of the mailings can be converted to paperless, how much would the company save from the paperless billing system (be sure to consider the cost of the paperless billing system)? Samson Entertainment is a provider of cable, Internet, and on-demand video services (Click the icon to view additional information.) Samson has gathered its cost data for the past year by quarter for paper, toner cartridges, printer maintenance costs, and postage costs for the billing department F(Cick the icon to view the cost data) Read the requirements The company would save $ by using the paperless billing system. Requirement 3. What if only 30 % of the mailings are converted to the paperless option (assume a total of 620.000 bills)? Should the company still offer the paperlesS billing system? Explain your rationale. offer the paperless If only 30 % of the mailings are converted to the paperless option, the company by using the paperless billing system. billing system because the company
