Information Technologies (IT) is a shared service for the operating divisions Operations and Maintenance and the balance of the costs remains in the Head Office Administration division where the IT departments resides.

IT has two customer service departments:Support Desk and Computer Services. In the past the allocation for both the support desk and computer services costs has been based on average employee count in each division for the year.

For next year the Management Accounting department has been approached to use a more sophisticated and accurate method of allocation. They do some research and come up with two further options.

Option B

• Support desk has six (6) staff. IT estimates that three (3) are assigned full-time to Operations, one full-time to Maintenance and the remainder covers Administration's needs and backup as required.
• Computer services has three (3) staff. IT estimates that the split of inquiries and work is 60% Operations and 10% Maintenance and the remainder is Administration including IT's own requirements.

Option C

After further review and discussions, it is discovered that IT has standards they use for their own staff planning and budgeting based on their tracking of resource usage.

• For Support desk, the average time spent is 0.5 hours per inquiry.
• The Computer services team spends an average of 1.5 hours per inquiry and 6.0 hours on each computer replacement.
• Any costs not allocated to Operations and Maintenance will remain with Head Office to cover Administration and other IT department requirements.

Each IT staff member is assumed to have 1,500 available hours annually for customer support activities.

Function Annual Budget $ Staffing Support desk 360,000 6 Computer services 225,000 3 Annual metrics Operations Maintenance Administration Headcount (staffing level) 240 55 74 Support desk inquiries/year 9,360 2,145 2,886 New computers/year 48 11 15 Computer services 1,440 330 444 inquiries/year