14
Pertinax's service revenue thus consisted of reimbursement of its
out-of-pocket expenses, plus a markup. To determine the
allocation of its charges, Pertinax would survey its employees
every 3 or 4 months, asking each of them to allocate his time
spent in servicing the three partners. Most of Pertinax's 25 to
30 employees at the El Centro property received the periodic
questionnaires. The percentages derived from this survey were
used to allocate Pertinax's costs among the three corporate
partners. These surveys were conducted regularly, and, if an
employee's activities changed from a prior survey, that change
was taken into account, and the costs attributable to that
employee were reallocated appropriately. Pertinax generated
invoices for the charges allocated to each partner, and all of
the partners paid Pertinax's invoices on a timely basis. All
four entities--UCIC, Alondra, Edco, and Pertinax--maintained
separate general ledgers.
During 1987, 41 employees of Pertinax--apart from Mr.
Munro--were listed on Pertinax's Payroll Year to Date Report.
They performed the following services and/or occupied the
following positions: Computer person, accounting, invoicer,
executive administrator, receptionist, administrator, accounting
in sales department, clerical, invoicing, handling of claims,
data processing, supervision of Alondra's production, accounts
receivable/collections, sales training, controller, and in-house
attorney. Together, they received $982,740 of wages and salaries
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