1. Classify each cost item as fixed, variable, or semi-variable. Explain your classification.

Prestige Data in table form

Revenue Hours	January	February	March
Intercompany	206	181	223
Commercial	123	135	138
Total revenue hours	329	316	361
Service hours	32	32	40
Available hours	223	164	143
Total hours	584	512	544
	January	February	March
Revenues
Intercompany sales	$82,400	$72,400	$89,200
Commercial sales
Computer use	98,400	108,000	110,400
Other	9,241	9,184	12,685
Total revenue	$190,041	$189,584	$212,285
Expenses
Space costs:
Rent	$8,000	$8,000	$8,000
Custodial services	1,240	1,240	1,240
Total	9,240	9,240	9,240
Equipment costs
Computer leases	95,000	95,000	95,000
Maintenance	5,400	5,400	5,400
Depreciation:
Computer equipment	25,500	25,500	25,500
Office equipment and fixtures	680	680	680
Power	1,633	1,592	1,803
Total	128,213	128,172	128,383
Wages and salaries
Operations	29,496	29,184	30,264
Systems development and maintenance	12,000	12,000	12,000
Administration	9,000	9,000	9,000
Sales	11,200	11,200	11,200
Total	61,696	61,384	62,464
Materials	9,031	8,731	10,317
Sales promotions	7,909	7,039	8,083
Corporate services	15,424	15,359	15,236
Total expenses	$231,513	$229,925	$233,723
Net income (loss)	($41,472)	($40,341)	($21,438)

Exhibit 1 Prestige Data Services Summary of Computer Utilization, First Quarter 2003 Revenue Hours January February March 223 138 Intercompany Commercial Total revenue hours Service hours Available hours Total hours 206 123 329 32 223 584 181 135 316 32 361 40 143 164 512 544 Exhibit 2 Prestige Data Services Summary Results of Operations, First Quarter 2003 January February March $82,400 $72,400 $89,200 Revenues Intercompany sales Commercial sales Computer use Other Total revenue Expenses Space costs: Rent Custodial services 98,400 9,241 $190,041 108,000 9,184 $189,584 110,400 12,685 $212,285 $8,000 1,240 9,240 $8,000 1,240 9,240 $8,000 1,240 9,240 95,000 5,400 95,000 5,400 95,000 5,400 Equipment costs Computer leases Maintenance Depreciation: Computer equipment Office equipment and fixtures Power 25,500 680 1,633 128,213 25,500 680 1,592 128,172 25,500 680 1,803 128,383 Wages and salaries Operations Systems development and maintenance Administration Sales Materials Sales promotions Corporate services Total expenses Net income (loss) 29,496 12,000 9,000 11,200 61,696 9,031 7,909 15,424 $231,513 $(41,472) 29,184 12,000 9,000 11,200 61,384 8,731 7,039 15,359 $229,925 $(40,341) 30,264 12,000 9,000 11,200 62,464/ 10,317 8,083 15,236 $233,723 $(21,438)