Project Description:

review the prestige telephone company case study (pages 4-13 to 4-15). complete the following case study questions from page 4-15:
(a) appraise the results of operations of prestige data services. in excel, complete the standard costs per month calculation. (b) is the subsidiary really a problem to prestige telephone company? consider carefully the differences between reported costs and costs relevant for decisions that daniel rowe is considering. using the data computed in part a, analyze the types of costs included and their behavior.
assuming the company demand for service will average 205 hours per month, what level of commercial sales of computer use would be necessary to break even each month? in excel, complete the break-even analysis.
estimate the effect on income of each of the options rowe has suggested if bradley estimates as follows:
(a) increasing the price to commercial customers to $1,000 per hour would reduce demand by 30%.
(b) reducing the price to commercial customer to $600 per hour would increase demand by 30%.
(c) increased promotion would increase sales by up to 30%. bradley is unsure how much promotion this would take. (how much could be spent and still prestige data services with no reported loss each month if commercial hours were increased 30%?)
(d) reducing operations to 16 hours on weekdays and 8 hours on saturdays would result in a loss of 20% of commercial revenue hours. in excel, complete the effect of alternative options on income calculations and the comparison questions presented for each alternative in the spreadsheet.
can you suggest changes in the accounting and reporting system now used for operations of prestige data services which would result in more useful information for rowe and bradley?
text: accounting for managers: text and cases, 3/e by william j. bruns, jr.
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