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Salem Telephone Case Solutions

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Salem Telephone Case

1) In my opinion the expenses that are variable with respect to revenue hours at Salem Data Services are Power, Hourly personnel, and Sales promotion. I believe these expenses are variable because they change with revenue. Corporate services is a mixed cost and there is not enough information to ascertain the portion that is variable. The fixed expenses with respect to revenue include, Space costs, Equipment costs, depreciation expense, Salaried staff, system development and maintenance, administration and sales.

2) Salem Data Services First Quarter 2004 Summary of Computer Utilization

| |January |February |March |Total Qtr |
|Number of Weekdays (M-F) |22 |20 |23 |65 |
|X 24 hours per day |528 |480 |552 |1560 |
|Number of Saturdays |5 |4 |4 |13 |
|X 8 hours per day |40 |32 |32 |104 |
|Total hours available for revenue |568 |512 |584 |1664 |
|Revenue Hours | | | | |
|Intracompany |206 |181 |223 |610 |
|Commercial

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