Is/Pm 535 Assignment #1 Analysis of It Cost Structure

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IS/PM 535 Assignment #1 Analysis of IT Cost Structure

This assignment requires you to apply your knowledge about responsibility centers, cost drivers, and cost structure (classification and behavior) in the context of four types of services provided by an information technology organization:
1. IT help desk service
2. E-Mail Service
3. Enterprise systems (e.g., financial, HR, DePaul’s student registration systems )
4. Website development service.
Follow these steps in your analysis:
1. Define the scope and the financial objective of each service.
2. Organize each IT service as a cost or profit center. You may provide some assumptions about the service in your explanation.
3. Identify typical cost drivers for each service. Choose one or two appropriate cost drivers. Remember: cost drivers cause variable costs to change. Among many potential cost drivers, which ones are most appropriate?
4. Identify 4 or more cost items for each service (cost object). Typical costs items are labor, material (equipment, etc.), overhead (electricity, etc.). You can use exercise #1 in worksheet #1 as a reference, although that example is more specific on focus group sessions. Be specific.
5. Identify the cost structure for resources required to deliver each identified service
(Direct/Indirect and Fixed/Variable).
6. Provide a brief comment to explain any unique perspectives.

**Present your analysis in the following order:
Name of service (cost object)
Definition: a paragraph about the scope of this service
Type of responsibility center: cost center OR profit center
Financial objective: only for this service
Typical cost driver(s): primary (and candidate) cost drivers, not cost items
Cost items: Identify the most relevant and specific cost items.
For each cost item
Cost structure of each item (direct/indirect; fixed/variable)
Explanation or…...

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