Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
Marigold 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 closely 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 sstem'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 $287,080 per year to operate. Customer Dale Matthews Johnson Flowers Daniel Total Gigabytes of Storage 39,382 76,233 851 20 19,819 136,305 Number of Tape Mounts 69.637 144,527 5,073 1.979 8.448 229,664 Calculate the activity cost rate for the data storage department using the number of tape mounts as the activity driver. (Round answer to 2 decimal places, es. 15.25) Activity cost rate per tabe mount Calculate the activity cost rate for the data storage department using the number of tape mounts as the activity driver. (Round answer to 2 decimal places, e... 15.25) Activity cost rate per tape mount Using this rate, determine the data storage costs that should be allocated to each customer. (Round answers to 2 decimal places, eg. 15.25.) Customer Allocated Storage Cost $ Dale Matthews Johnson Flowers Daniel Total $ Calculate the activity cost rate for the data storage department using sigabytes of data storage as the activity driver. (Round answer to 2 decimal places, es 15.25) Activity cost rate per gigabyte Using this rate, determine the data storage costs that should be allocated to each customer (Round answers to 2 decimal places, eg. 15.25) Customer Allocated Storage Cost Dale $ Matthews Johnson Flowers Daniel Total $

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_2

Step: 3

blur-text-image_3

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

Applied Conic Finance

Authors: Dilip Madan, Wim Schoutens

1st Edition

1107151694, 978-1107151697

More Books

Students also viewed these Finance questions