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Salem Telephone Case


1) Which expenses are variable and which are fixed with respect to revenue hours?
Variable Fixed
Power Rent
Hourly personnel Custodial Services
Sales promotion Computer leases
Corporate services Maintenance
Depreciation expenses - computer and office
Salaried employees
Systems development
Sales

2) For each expense that is variable, calculate the cost per revenue hour.
Power Personnel Sales Promotion Corporate Services
January 1,546 7,896 7,909 15,424
February 1,485 7,584 7,039 15,359
March 1,697 8,664 8,083 15,236
Total 4,728 24,144 23,031 46,019
Revenue Hours
January 329
February 316
March 361
Total 1,006

Total Cost/Hour 4.70 24.00 22.89 45.74

3) Create a contribution margin income statement for Salem Data Services. Assume that intra company usage is 205 hours. Assume commercial usage is at......

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Approximate Word Count: 599
Approximate Pages: 3 (250 words per double-spaced page)

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