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Haley Romeros had just been appointed vice president of the Rocky Mountain Region of the Bank Services Corporation (BSC). The company provides check processing

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Haley Romeros had just been appointed vice president of the Rocky Mountain Region of the Bank Services Corporation (BSC). The company provides check processing services for small banks. The banks send checks presented for deposit or payment to BSC, which records the data on each check in a computerized database. BSC then sends the data electronically to the nearest Federal Reserve Bank check-clearing center where the appropriate transfers of funds are made between banks. The Rocky Mountain Region has three check processing centers, which are located in Billings, Montana; Great Falls, Montana; and Clayton, Idaho. Prior to her promotion to vice president, Ms. Romeros had been the manager of a check processing center in New Jersey. Immediately after assuming her new position, Ms. Romeros requested a complete financial report for the just-ended fiscal year from the region's controller, John Littlebear. Ms. Romeros specified that the financial report should follow the standardized format required by corporate headquarters for all regional performance reports. That report follows: Bank Services Corporation (BSC) Rocky Mountain Region Financial Performance Sales Operating expenses: Direct labor Variable overhead Total $50,000,000 Billings $20,000,000 Check Processing Centers Great Falls $18,000,000 Clayton $12,000,000 32,000,000 12,500,000 11,000,000 850,000 350,000 310,000 Equipment depreciation 3,900,000 1,300,000 1,400,000 8,500,000 190,000 1,200,000 Facility expense 2,800,000 900,000 800,000 1,100,000 Local administrative expense 450,000 140,000 160,000 150,000 Regional administrative expense 1,500,000 600,000 540,000 360,000 Corporate administrative expenses 4,750,000 1,900,000 1,710,000 1,140,000 Total operating expense 46,250,000 17,690,000 15,920,000 12,640,000 Net operating income (loss) $3,750,000 $ 2,310,000 $ 2,080,000 $ (640,000) Includes building rental expense for the Billings and Great Falls locations and building depreciation for the Clayton location. 'Local administrative expenses are the administrative expenses incurred at the check processing centers. 'Regional administrative expenses are allocated to the check processing centers based on sales. SCorporate administrative expenses are charged to segments of the company such as the Rocky Mountain Region and the check processing centers at the rate of 9.5% of their sales.

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