Data Processing Costs

Distributing data processing (DP) costs consists of estimating the value of the services provided by the DP department for each user department and transferring the costs to that department. An allocation system results in more realistic demands for services and better use of the services and provid...

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Bibliographic Details
Published inMortgage banking Vol. 49; no. 8; p. 65
Main Authors Bullard, Ruth H, Walz, Diane B, Bomely, Roger, Bline, Dennis M
Format Magazine Article
LanguageEnglish
Published Washington Mortgage Bankers Association of America 01.05.1989
Subjects
Chargebacks
Cost allocation
Cost control
Cost estimates
Data processing
Profit centers
Savings & loan associations
Surveys
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Summary:Distributing data processing (DP) costs consists of estimating the value of the services provided by the DP department for each user department and transferring the costs to that department. An allocation system results in more realistic demands for services and better use of the services and provides a way of measuring and monitoring resources. There seems to be a consensus that the DP department should be a profit center and charge market prices for its services. To investigate the extent to which DP costing systems were being used, a questionnaire was mailed to 100 of the largest savings & loan associations in the US. A small percentage of the respondents used charge-back systems, primarily because the system lacked the ability to capture the information. In designing a charge-back system, it is recommended that the user accept bids from the DP department and any outside vendors. If the variance in price is favorable to the DP's budgets, the users and the company will have spent the money wisely.
ISSN:0730-0212
1930-5087