Assume commercial usage at the March level.
He moved to Canada in and to the United States in Flores initially believed that Salem Data Services would be profitable subsidiary for the parent company, Salem Telephone Company.
Fixed costs : The rent, custodial service, computer leases, maintenance, computer equipment, office equipment and fixtures, salaried staff, system development and maintenance, administration, sales promotion, Corporate service.
Peter Flores made suggestions to increase promotion as well as reduce price but separately.
Units: dollars per hour January February March Power expense 4. Salem Telephone Company — Case Study Summary In Salem Telephone established a subsidiary, Salem Data Services, for the purpose of performing data processing services for the telephone company and to meet this need for other companies.
Flores questioned whether the accounting reports truly painted a clear picture of the contribution that Salem Data Services was making to Salem Telephone.Computer equipment fixed cost as indicated Office equipment and fixtures fixed cost as indicated Wages and salaries: 1. Words: - Pages: 5 Salem Case Study Create a contribution margin income statement for Salem Data Service. This took place in Salem Massachusetts during a time when the devil was strongly believed in. Another factor in choosing what type of telecommunications a company will need is what type of business does the company deal with. With Incremental analysis we will be able to calculate the differences in revenue and costs between decision alternatives. When determining which expenses are considered to be fixed or variable for SDS you need to remember that expenses are based on revenue hours. Should Grant proceed with the venture? Salem Telephone Company Case Study 1. Firstly, Flores should consider the promotion can be the turning point or not. As a matter of fact, the telephone system had come to numerous facelifts that it literally connected the world before the internet was born. Therefore, they are fixed with respect to revenue hours.
The financial ratios help determine the financial health of a company Since Salem Telephone company was a regulated utility it drove the need for Salem Data Services to be a separate entity since it was an unregulated utility.
Letter or rectal temperatures. Because Salem Telephone Company was a regulated utility, it needed to gain approval for this venture.