What are four chargeback methods? In your view, is one more “fair” than another?

Question

What will be an ideal response?

Answer 1

A chargeback method is a method of allocating the indirect costs of running the IT department. Most organizations adopt one of four chargeback approaches: no charge; fixed charge; variable charge based on resource usage; or variable charge based on volume.
1) The no charge approach treats IT department services as a necessary cost of doing business that benefits the entire company, rather than a particular department.
2) The fixed charge method divides indirect IT costs among all the other departments in the form of a fixed monthly charge.
3) The method called variable charge based on resource usage assigns costs based on the resources used by an information system. Resources might include CPU time, printer use, or a combination of similar factors.
With a variable charge based on volume approach, the indirect IT department costs are allocated to other departments based on user-oriented activity, such as the number of transactions.
There is no single answer to the second part of the question, regarding what is “fair.” Student answers might depend on their own business experience (or lack of it). In any case, the reasoning is the important thing, and whether the student has a grasp of the differences.