Free Essay


In: Business and Management

Submitted By idyl
Words 539
Pages 3
Prestige Telephone (Case #2)
Due at the beginning of the first class after Thanksgiving break (12/1 or 12/2). Target length is two pages of discussion supplemented by tables (as needed).
Modified / revised case questions (use these in conjunction with the questions in the case). 1. Read the case question as presented (page 3 of the case). Alternative interpretations for this question are, “Does Prestige Data Services cost Prestige Telephone money?” or “Does Prestige Telephone absorb the loss that Prestige Data Services incurs?”
How would you present an alternative accounting statement for Prestige Data Services? Here, imagine you are the Data Services manager planning to meet with the Prestige Telephone board of directors.

An: By analysis the Prestige Data Services Summary Results of operations (Exhibit 2), the costs from PDS is decreased from January to March. And in March, DPS does not costing PT money. | January | February | March | Net Income | (41,472) | (40,341) | (21,438) | Fixed expense: | | | | Rent | 1240 | 1240 | 1240 | Custodial service | 9240 | 9240 | 9240 | Computer lease | 95000 | 95000 | 95000 | maintenance | 5400 | 5400 | 5400 | | 69,408 | 70,539 | 89,442 |

The table above shows that PDS’s net income increasing incrementally. This subsidiary has potential to earn money to parent company in the future. So, keep PDS is better for Prestige Telephone company.

2. Respond to the case question, but think carefully about how the intercompany charge affects your breakeven analysis. (Hint: the intercompany charge at 205 hours of service is similar to a ‘contra fixed cost’.)

An: power = (1803-1592)/ (401-348) = $3.98 rand to 4 Salaries for operations only = (30264-29184)/ (361-316) =$24 Total VC =4+24 =$28/hr B/E hours =total FC-VC of intercompany operations/ contribution per hour = {197820-[82000-(205*28)]}/ (800-28) =157.5 hours 157.5 hours @$800/hr =$126000 of commercial revenues each month.

3. For clarification: treat each situation independently. In other words, compare 3a’s change (a price increase) to the current ‘status quo’; then compare 3b’s change (a price decrease) to the current ‘status quo’, etc.

What is the best option for Prestige Data Services?

An: a) old demand =138 hrs New demand =138*0.7 =96.6 hrs Contribution original =106,536 Contribution new =96.6 *(1000-28) = 93,895.2 So, better keep original pricing. b) Old demand =138 hrs demand new =138*1.3 =179 hrs Contribution original =106,536 Contribution new =179*(600-28) =102,388 So, better keep present pricing.

c) New contribution =179*(800-28) =138,188 Contribution original =106,536 Difference equals to 31,652, the maximum we could spend on advertising to earn the new sales.

d) Demand original =138 hrs Demand new =110 hrs Contribution original =106,536 Contribution new =110*(800-28) =84,920 So, better keep original pricing. 4. Replace the current question with this one: “How might you change performance incentives(dong ji) at Prestige Data to improve future e operations?” Note: question 4 in the case is distinct from the preceding question.


5. If you were a consultant(guan wen), what would you recommend to Mr. Rowe and Ms. Bradley regarding(about) the future of Prestige Data Services?

Similar Documents

Free Essay


...RANK LIST OF MBA CANDIDATES WHO HAVE APPEARED FOR THE ENTRANCE TEST FOR ADMISSION TO MBA COLLEGES FOR THE YEAR 2012-13. M.B.A Sl No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 CET NO. AA002 AA004 AA005 AA006 AA007 AA008 AA009 AA010 AA014 AA017 AA018 AA020 AA021 AA022 AA023 AA025 AA026 AA027 AA028 AA029 AA031 AA033 AA035 AA036 AA039 AA040 AA041 AA043 AA044 AA045 AA046 AA047 AA048 AA049 AA050 AA051 AA052 AA055 AA056 AA057 AA058 AA060 AA061 AA062 AA063 AA064 AA065 AA066 AA067 AA069 Candidate Name GENDER Version Code CET SCORE MBA Rank(*) MOHAMMED IRFAN NIRMALA Y.N MANJUNATH JEEVAN KUMAR VIJAINDRA KULKARNI REDDAPPA M V LINGANAGOUDA M PATIL ARCHANA NAIK Maitri R Bhat Shashi Kiran B.N. arupananda das RASHMI. P YELLESH V CHETAN KUMAR .S SHARATH G SANJEEV D AMRUTHA C MARIGERI Bharath kumar B.S Asha B Shilpashree M S SHASHIVENI R J SUPREETH Y S.Sandhya KUSHAL KUMAR R SARIYA FARNAZ S Madhu S N NAVEENA P SIBI AKBARALI P.T SUMAN RANI SAMINUR RAHMAN Namratha S KIRAN RAJ S DEEPIKA T M ASHWINI H PUNEETH KUMAR M Naveen V Smitha G S SUNIL M ANJURU PRADEEP CHETAN KUMAR JADAV G DILIP KUMAR V ASHWINI VIJAY PRASANNA M Jagannath Honnakatti NITHIN KUMAR KOTTE VINAY BALARAJ Yateesh Kumar V SUJAY.C Harsha G D RAJANALA MAMATHA RANI P SAMANTHA M F M M M M F F M M F M M M M F M F F F M F M F M F M F M F M F F M M F M M M M F M M M M M M F F F A2 A4 A1 A2 A3 A4 A1 A2 A2 A1 A2 A4 A1 A2 A3 A1 A2 A3 A4 A1......

Words: 186272 - Pages: 746