Question: A telecommunications company tracks its customer service, network maintenance, and equipment costs over three years. Year Customers Served Customer Service Cost Cost per Customer (Service)
A telecommunications company tracks its customer service, network maintenance, and equipment costs over three years.
| Year | Customers Served | Customer Service Cost | Cost per Customer (Service) | Network Maintenance Cost | Cost per Customer (Maintenance) | Equipment Cost | Cost per Customer (Equipment) |
|---|---|---|---|---|---|---|---|
| 1 | 5,000 | $70,000 | $95,000 | $100,000 | |||
| 2 | 10,000 | $70,000 | $110,000 | $200,000 | |||
| 3 | 2,500 | $70,000 | $65,000 | $50,000 |
Required: a. Determine the cost per customer for each cost. b. Classify each cost as fixed, variable, or mixed. c. Analyze how each cost behavior affects customer service quality and network reliability. d. Discuss the implications of cost behavior for long-term strategic planning. e. Propose measures to optimize customer service, network maintenance, and equipment costs.
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