“Revenue hours” represent the key activity that drives costs at Salem Data Services. Which expenses in Exhibit 2 are variable with respect to revenue hours? Which expenses are fixed with respect to revenue hours?
Variable expenses with respect to revenue hours
Power
Operations: hourly personnel
Corporate services
Fixed expenses with respect to revenue hours:
Space costs:
Rent
Custodial services
Computer leases
Maintenance
Depreciation:
Computer equipment
Office equipment and fixtures
Wages and salaries:
Operations: salaried staff
Systems development and maintenance
Administration
Sales
Sales Promotion
For each expense that is variable with respect to revenue hours, calculate the cost per revenue hour.
| January | February | March |
Revenue hours | | | |
Intracompany | 206 | 181 | 223 |
Commercial | 123 | 135 | 138 |
Total revenue hours | 329 | 316 | 361 |
| January | February | March |
Variable Expenses | | | |
Power | 1,546 | 1,485 | 1,697 |
Operations: hourly personnel | 7,896 | 7,584 | 8,664 |
Corporate services | 15,424 | 15,359 | 15,236 |
Total variable expenses | 24,866 | 24,428 | 25,597 |
Cost per revenue hours = Variable Expenses / Total revenue hours
Power per revenue hours = Power / Total revenue hours
Operations: hourly personnel per revenue hours = Operations: hourly personnel / Total revenue hours
Corporate services per revenue hours = Corporate services / Total revenue hours
| January | February | March |
Cost per Revenue Hours | | | |
Power | 4.70 | 4.70 |...