Required information Market Makers Incorporated (MMI) provides a range of services to its retail clients-customer service for inquiries, order taking, credit checking for new customers, and a variety of related services. Auto Supermarket (AS) is a large auto dealer that provides financing for the autos and trucks that it sells. AS has approached MMI to manage the inquiries that come in regarding these loans. AS is not satisfied with the performance of the call center it currently uses for handling inquiries on these loans and is considering a change to MMI. MMI has been asked to estimate the cost of providing the service for the coming year. There are two types of loans at AS, one for autos and SUVs and another for light trucks. The loans for auto and truck buyers typically have different types of customers and loan terms, so the nature and volume of the inquiries are expected to differ. MMI would use its own call center to handle the AS engagement. The MMI call center's annual costs are as follows: Call center costs Salaries Utilities Leasing of facilities Other expenses Total $ 4,263,555 2,527,446 2,025,513 823,036 $ 9,639,550 MMI's call center is staffed 12 hours per day with 60 call staff always available. Each staff member has a paid 10-minute break for each hour worked, and an unpaid 1-hour break for a lunch/dinner during each 12-hour shift. Thus, the call center has 12,045,000 minutes (11 hr * 50 min * 60 staff * 365 days) available for calls during the year. AS and MMI work together to estimate the number of calls and time required for each call, based on AS's prior experience with its current call center. MMI's call center is staffed 12 hours per day with 60 call staff always available. Each staff member has a paid 10-minute break for each hour worked, and an unpaid 1-hour break for a lunch/dinner during each 12-hour shift. Thus, the call center has 12,045,000 minutes (11 hr * 50 min 60 staff * 365 days) available for calls during the year. AS and MMI work together to estimate the number of calls and time required for each call, based on AS's prior experience with its current call center. Total Calls Answered Average Number of Minutes/Call Total Time (minutes) 80,400 32,400 6 7 482,400 226,800 Inquiries Inquire re: rates and terms Autos Trucks Inquire re: loan application status Autos Trucks Inquire re: payment status Autos Trucks Inquire re: other matters Autos Trucks 45,400 6,790 5 11 227,000 74,690 39,400 12,400 118,200 49,600 29,400 8,540 11 15 323,400 128, 100 1,630,190 Required: 1. Determine the amount that MMI should propose to charge AS for the coming year using TDABC, assuming MMI desires a profit of 30% of incurred cost. 2. Suppose that AS wants the proposal broken down by type of loan (auto, truck). What would the proposal look like now? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the amount that MMI should propose to charge AS for the coming year using TDABC, assuming MMI desires a profit of 30% of incurred cost. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole number.) The cost of the engagement The final cost after markup Required: 1. Determine the amount that MMI should propose to charge AS for the coming year using TDABC, assuming MMI desire 30% of incurred cost. 2. Suppose that AS wants the proposal broken down by type of loan (auto, truck). What would the proposal look like now Complete this question by entering your answers in the tabs below. Required 1 Required 2 Suppose that AS wants the proposal broken down by type of loan (auto, truck). What would the proposal look like now? (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole number. Round "Time markup" to 2 decimal place.) The revised proposal would show: Cost for Autos Cost for Trucks Total Cost Time markup Total Charge for Engagement Suppose that in addition to the call center engagement outlined earlier, MMI also provides the following annual service to 10 other clients: Platinum Regional Bank Healthwise Software Incorporated Johnson Manufacturing Lesco Online Shopping Babcock Insurance Service Garcia Electric Supply and Service Gilbert's Online Garden Supplies Financial Planning Services Incorporated Porter's Camera and Optical Jordan Auto World Incorporated Total Calls Answered 232, 600 66,828 121,265 232,356 55,495 38,996 144,502 69,033 197,040 964,487 Average Number of Minutes/Call 6.0 5.0 4.0 6.0 5.5 3.4 4.5 11.0 5.5 3.5 Required: 1. What is the level of idle capacity at MMI, not assuming that AS becomes a customer? 2. Assume that AS comes back to MMI with a revised proposal. The revised proposal includes call center activity as described above, but in addition, AS wants MMI to provide error-checking services for those who apply for loans at AS. MMI would use some of the call center staff, after appropriate training, to complete the processing of the credit checks. AS expects the following service to be needed: Processing Credit Checks Auto Truck Requests 45,460 12,360 Minutes/Request 7 12 What would be the idle capacity with the revised proposal? What would be the cost of the idle capacity? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the level of idle capacity at MMI, not assuming that AS becomes a customer? (Round your intermediate calculations and final answers to the nearest whole number.) Idle Capacity minutes Required 1 Required 2 What would be the idle capacity with the revised proposal? What would be the cost of the idle capacity? (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole number.) minutes Revised Idle Capacity Cost Idle Capacity Burad 4