Prestige Data Services Summary of Computer Utilization, First Quarter 1997

Revenue Hours January February March

Intercompany 206 181 223
Commercial 123 135 138
Total Revenue Hours 329 316 361
Service Hours 32 32 40
Utilized Hours 361 348 401
Available Hours 175 188 167
Total Hours 536 536 568

Prestige Data Services Summary Results of operations, First Quarter 1997

January February March

Revenues:
Intercompany sales 82,400 72,400 89,200 Direct Revenue

Commercial sales:
Computer use 98,400 108,000 110,400 Direct Revenue
Other 9,241 9,184 12,685 Indirect Revenue
Total revenue 190,041 189,584 212,285

Expenses:
Space Costs:
Rent 8000 8000 8000 Fixed
Custodial Services 1240 1240 1240 Fixed
9240 9240 9240
Equipment Costs:
Computer leases 95000 95000 95000 Fixed
Maintenance 5400 5400 5400 Fixed
Depreciation:
Computer equipments 25500 25500 25500 Fixed
Office equipment and fixtures 680 680 680 Fixed
Power 1633 1592 1803 Semi-varia
128213 128172 128383
Wages and Salaries:
Operations 29,496 29,184 30,264 Semi-varia
Systems development and maintenanc 12,000 12,000 12,000 Fixed
Administration 9,000 9,000 9,000 Fixed
Sales 11,200 11,200 11,200 Fixed
61,696 61,384 62,464
Materials 9,031 8,731 10,317 Non-operational cost
Sales promotions 7,909 7,039 8,083 Budget
Corporate Services 15,424 15,359 15,236 Budget
Total Expenses 231,513 229,925 233,723
Net Income (Loss) ($ 41,472.00) ($ 40,341.00) ($ 21,438.00)

Fixed 168,020
Fixed V part 21664.149
189684.149
7,677
197361.149
Total Fixed Cos 197384

2 commercial sales
205 average hours
CM =800-4.53-80.13
771.47

205 Hrs
CM 158151.35 371.47 76151.35
121232.7

=fixed - contribution from interc

Cost to be recovered to
arrive at break-even 121232.65
Break-even hours 157.1449959
Revenue at Break-even 125715.9967

3. a. Increasing the price to commercial customers to $1000 per hour would reduce demand by 30 percent.

Reduction in demand 97
New price 1000
Variable Cost 29

Income 94205.7501

Present Income =138*(800-C77) 106424.6754 12218.9253

Income will be higher if we maintain the price as 800$

3.b. Reducing the price to commercial customers to $600 per hour would increase demand by 30 percent.

Increase in demand 179.4

New price 600
Variable cost 84.66

Income 92451.996

Present Income 138*(800-84.66) 98716.92

Income will be higher if we maintain the price as 800$
3.c. Increased promotion would increase sales by up to 30 percent. Bradley is unsure how much promotion this would take.

Increase in demand 179

Sale Price 800
Variable cost 29
771
Income 138043.6007

Bradley can spent up to $ 28607 so that he can meet the income of current level. Beyond which spending decreases our net in

3.d. Reducing operations to 16 hours on weekdays and eight hours on Saturdays would result in a loss of 20 percent of comm

Increase in demand 110.4

Sale Price 800
Variable cost 84.66

Income 78973.536

Income will be higher if we maintain the price as 800$

 Power
1,850

1,800
Hours Power f(x) = 4.80671224362958 x + 64.1491609695463
R² = 0.989989946798519
329 1,750
1,633
316 1,700
1,592
361 1,803
1,650
370
546.6667 1,600
0.676829 1,550

1,500

1,450
310 320 330 340 350 360 370

Direct Revenue

Direct Revenue
Indirect Revenue

Fixed Variable
64.149 4.8067

Fixed Variable
21,600 24

Non-operational cost
=fixed - contribution from intercompany

by 30 percent.

Contribution from IC 76093.95

Contribution From Co 94205.75
Total Fixed 197384
Net Profit -27084.3

y 30 percent.
uch promotion this would take.

Contribution from IC 76093.95

Contribution From Co 138043.6
Total Fixed 197384
Net Profit 16753.55

ich spending decreases our net income compared to our current position.

lt in a loss of 20 percent of commercial revenue hours.