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Target Costs, Effect of Process-Design Changes On Service Costs. Sun Systems Provides Energy

Sun Systems provides energy audits in southern Ohio to educate homeowners on the benefits of solar energy and available rebates and tax incentives. The costs of these audits depend on identifying new contacts, travel between appointments, and preparing and filing rebate/tax forms. In 2012-2013, the consultant labor cost was $35/hour, average cost per new contact was $9-7, travel cost was $0.55-0.65/mile, and preparing/filing cost was $9.10-9.50/clerical hour.

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358 views1 page

Target Costs, Effect of Process-Design Changes On Service Costs. Sun Systems Provides Energy

Sun Systems provides energy audits in southern Ohio to educate homeowners on the benefits of solar energy and available rebates and tax incentives. The costs of these audits depend on identifying new contacts, travel between appointments, and preparing and filing rebate/tax forms. In 2012-2013, the consultant labor cost was $35/hour, average cost per new contact was $9-7, travel cost was $0.55-0.65/mile, and preparing/filing cost was $9.10-9.50/clerical hour.

Uploaded by

Louina Yncierto
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Target costs, effect of process-design changes on service costs.

Sun Systems provides energy


audits in residential areas of southern Ohio. The energy audits provide information to homeowners on the
benefits of solar energy. A consultant from Sun Systems educates the homeowner about federal and state
rebates and tax credits available for purchases and installations of solar heating systems. A successful
energy audit results in the homeowner purchasing a solar heating system. Sun Systems does not install
the solar heating system, but arranges for the installation with a local company. Sun Systems completes
all necessary paperwork related to the rebates, tax credits, and financing. The company has identified
three major activities that drive the cost of energy audits: identifying new contacts (that varies with the
number of new contacts); traveling to and between appointments (that varies with the number of miles
driven); and preparing and filing rebates and tax forms (that varies with the number of clerical hours).
Actual costs for each of these activities in 2012 and 2013 are:
2012 2013
Consultant labor cost per hour $35.00 $35.00
Average cost per new contact 9.00 7.00
Travel cost per mile 0.55 0.65
Preparing and filing cost per clerical hour 9.10 9.50Target costs, effect of process-design changes on service
costs. Sun Systems provides energy
audits in residential areas of southern Ohio. The energy audits provide information to homeowners on the
benefits of solar energy. A consultant from Sun Systems educates the homeowner about federal and state
rebates and tax credits available for purchases and installations of solar heating systems. A successful
energy audit results in the homeowner purchasing a solar heating system. Sun Systems does not install
the solar heating system, but arranges for the installation with a local company. Sun Systems completes
all necessary paperwork related to the rebates, tax credits, and financing. The company has identified
three major activities that drive the cost of energy audits: identifying new contacts (that varies with the
number of new contacts); traveling to and between appointments (that varies with the number of miles
driven); and preparing and filing rebates and tax forms (that varies with the number of clerical hours).
Actual costs for each of these activities in 2012 and 2013 are:
2012 2013
Consultant labor cost per hour $35.00 $35.00
Average cost per new contact 9.00 7.00
Travel cost per mile 0.55 0.65
Preparing and filing cost per clerical hour 9.10 9.50

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