You're the new CFO of Lufa, Inc., a leading consulting firm headquartered in Manhattan that has experienced dramatic growth over the past few years. You've been asked to overhaul the financial function as management believes their growth has created the need for a more sophisticated accounting system to provide better operational control over the company's burgeoning finances.

The company is profitable and divided into the following ten operating departments, each run by seasoned senior executives responsible for both managing their respective functions and controlling their department's operating budget.

1. Executive Management
2. Research Department
3. Account Management for Strategic Planning
4. Account Management for New Product Development
5. Finance & Accounting
6. Administration
7. Legal
8. Corporate Communications
9. Marketing
10. Analytics

Lufa is well managed with an industry reputation for providing high quality consulting to major corporations. It's also considered a good working environment and the company enjoys a stable dedicated workforce with some of the best people in the industry choosing Lufa as a career choice.

While management has a reputation for being benevolent employer, they do pay careful attention to controlling costs. So, they assigned, Carl the person in charge of the Administration Department, to come up with a plan for better control over the company's growing telecommunications costs which include office telephones, Internet access, cell phones (for certain employees) and a cable TV feed for the reception area.

Carl came up with a plan which included consolidating the company's telecom needs with a single provider. With management's approval he asked three companies to submit bids to provide all of Lufa's telecom needs under one contract.

In addition to bidding on costs and services, each company was asked to include in their proposal a commitment to provide monthly billing information that could be used by Lufa to oversee and control both variable and fixed costs associated with their telecom services. Variable costs includes the costs of each call from company phones (office and cell phones), including the phone numbers called and length and time of each call.

While Lufa allows employees to use company telephones to call home, their policy limits such calls to no more than 10 minutes and employees are not allowed to make personal long distance calls, except in emergencies. The billing information would therefore serve as a key control over the use of company telephones in accordance with company policy.

In addition, to the variable costs of the company phones, the service provider would be required to identify fixed monthly charges for excise taxes, maintenance fees and line charges for company phones, Internet access and cable TV service.

Which general ledger accounts you'd select to record Lufa's telecom expenses. In addition, which of the accounts you select should be charged to departments and which instead should be charged to a single corporate account rather than be charged to the division's budgets. Also explain your reasoning and strategy for controlling Lufa's telecom costs.