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A data centre is about to establish a
database service,to help other departments with accounting and financial
data processing:
•the resource costs of the data centre are currently $80,000
a year
•it will cost an additional $20,000 a year,in resource costs,to
provide the database
service
•the non-resource costs (overheads)for the data centre are currently
$25,000 a year
•the database service can be provided without adding to the non-resource
costs
(overheads)of the data centre
•it is expected that the database service will be used for 2,500
hours in each working year
•the same service could easily be provided for 5,000 hours in
each year,without
adding to the resource or non-resource costs.
The data centre wishes to charge other departments for using the services
of the database consultancy service.
(a)Calculate a suitable unit rate for the database service,based on
expected use,taking non-resource costs (overheads)into account.Explain
all of your working.[9 marks ]
Total data centre
costs, including new database service:
80, 000 +20,000 +25,000 =125,000 (current non-overhead cost +cost
of new
database service +existing overhead costs, which will not change).
2 marks for correct answer, award just 1 mark out of 2 if the candidate
forgets to add the cost of the new database service and gets a total
of 105,000 Cost of new database service as a percentage of the non-overhead
costs: 20,000 /100,000 =20% (cost /total non-overhead cost).
2 marks for a correct answer; 1 mark for correct, explained working
but incorrect answer; please take consequential error into account:
if candidate clearly explains what they are doing, but have made a
mistake in the calculation of the total data centre costs: that is,
award 2 marks for an answer of 19% here
Cost of database service including contribution to overhead: 20% *
125,000 =25,000 (fraction of non-overhead costs *total costs including
overheads).
2 marks for a correct answer; 1 mark if calculation basis clearly
explained but candidate uses wrong figures
Unit rate for the database service in dollars per hour:25,000 /2,500
=10 (cost / expected use).
3 marks for a correct answer including the words 'dollars per hour';
2 marks for correct answer without working or explanation; 1 mark
if calculation basis clearly explained but candidate uses wrong figures
overall: if candidate simply gives the correct answer of 10 dollars
per hour and includes no explanation, award 5 marks out of 9 [9 marks
]
(b)Suggest two reasons why it might be
felt appropriate to set a lower unit rate for the use of the database
service.[2 marks ]
It might be felt appropriate to set a lower unit rate because:
.the database service does not add to the overhead costs of the data
centre
.there is spare capacity in the resource: we might wish to encourage
the use of the service right up to 5,000 hours per year one mark for
each point [2 marks ]
(c)State how a lower unit rate might be determined,and calculate a
suitable value.
Explain all of your working.[4 marks ]
A lower unit rate might be determined by excluding the overhead cost.
1 mark Actual cost of resource: 20,000 Expected use: 2,500 Unit rate:
20,000 /2,500 =8 dollars per hour
3 marks for a correct figure with explanation; two marks for correct
figure with no explanation or working; one mark for correct explanation
but incorrect figure [4 marks ]
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