1. 0 INTRODUCTION
Prestige Service plans is a supplementary of Reputation Telephone Company, a open public utility. They are really a computer info service company that does data processing for the mother or father company in order to perform info processing intended for the telephone organization and to sell off computer providers to others and agencies. The company was opened to create the additional revenue in order to balance the boosts of mobile phone rate. Through two years penalized in operation the subsidiary have been unprofitable.
installment payments on your 0QUESTION you
Appraise the results of operations of Prestige Data Services (PDS). Is the subsidiary a real problem to Prestige Mobile phone Company (PTC)? Consider thoroughly the differences between reported costs and costs relevant intended for decisions that Daniel Rowe is considering. Answer:
The current data show that the PDS is operating in loss. Primarily based the shown data, yes, PDS is known as a problem to PTC at this point of time. There are plenty of major costs being consumed by PTC while asking a total towards corporate and business services to PDS. However the way info was gathered, costs calculated and presented could be not the same as the actual actuality. Moreover fashionable in the 3-4 months is that the business sales is certainly going up (marginally though) and losses happen to be keep reducing. Also it is reported that PDS is operating with un-used capacity, which can be another reason intended for the forecasted loss. Even though PDS is in loss at the moment, there are several ways the company might be profitable when the cost accounting method could be re-structured. The increases of marketing activities to be able to increase product sales can be organised by using free capacity readily available. Reducing the staff count simply by reducing the amount of shifts, can see PDS being rewarding in the long run. In the event that Rowe decided that PDS be shut down or sold, your decision has to be based on the ROI and the option cost. By simply closing straight down PDS, PTC will lose the consumer sales, which can be the opportunity costs the misplaced (customer)...