Managerial Accounting: Creating Value in a Dynamic Business Environment
11th Edition
ISBN: 9781259569562
Author: Ronald W Hilton Proffesor Prof, David Platt
Publisher: McGraw-Hill Education
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Chapter 2, Problem 34E
The state Department of Education owns a computer system, which its employees use for word processing and keeping track of education statistics. The governor’s office recently began using this computer also. As a result of the increased usage, the demands on the computer soon exceeded its capacity. The director of the Department of Education was soon forced to lease several personal computers to meet the computing needs of her employees. The annual cost of leasing the equipment is $14,000.
Required:
- 1. What type of cost is this $14,000?
- 2. Should this cost be associated with the governor’s office or the Department of Education? Why?
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The state Department of Education owns a computer system, which its employees use for word processing and keeping track of education statistics. The governor’s office recently began using this computer also. As a result of the increased usage, the demands on the computer soon exceeded its capacity. The director of the Department of Education was soon forced to lease several personal computers to meet the computing needs of her employees. The annual cost of leasing the equipment is $14,000.Required:1. What type of cost is this $14,000?2. Should this cost be associated with the governor’s office or the Department of Education? Why?
NYU currently purchases a basic anti-virus computer package that protects university computers
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or the premium service, Basic plus Bells and Whistles, for an annual cost of $12,000. The table
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Basic
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A Corporation manages the back office functions of private medical practices. The company is analyzing a project to digitize the collection of medical records. Last year, the company spent $400,000 during a pilot project to prove that the digitization project was a viable idea, and now the company is evaluating whether to invest in it. Acquiring the necessary computer hardware and software to implement the project will cost $10,000,000. In addition, successful implementation will require the corporation to spend $1,300,000 to install and customize the software, plus $700,000 to purchase hand-held digital devices that medical staff will use to record medical data. Corporation will depreciate the system over 4 years to a net book value of zero. The corp expects an immediate increase in its Accounts Receivable balance of $200,000 as a result of the project. Because the purchases of paper forms and files will decline, the company also expects an immediate decrease in Accounts Payable of…
Chapter 2 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 2 - Distinguish between product costs and period...Ch. 2 - Why are product costs also called inventoriable...Ch. 2 - What is the most important difference between a...Ch. 2 - List several product costs incurred in the...Ch. 2 - Prob. 5RQCh. 2 - Why is the cost of idle time treated as...Ch. 2 - Explain why an overtime premium is included in...Ch. 2 - Prob. 8RQCh. 2 - Give examples to illustrate how the city of Tampa...Ch. 2 - Distinguish between fixed costs and variable...
Ch. 2 - How does the fixed cost per unit change as the...Ch. 2 - Prob. 12RQCh. 2 - Distinguish between volume-based and...Ch. 2 - Would each of the following characteristics be a...Ch. 2 - List three direct costs of the food and beverage...Ch. 2 - List three costs that are likely to be...Ch. 2 - Which of the following costs are likely to be...Ch. 2 - Distinguish between out-of-pocket costs and...Ch. 2 - Define the terms sunk cost and differential cost.Ch. 2 - Distinguish between marginal and average costs.Ch. 2 - Prob. 21RQCh. 2 - Two years ago the manager of a large department...Ch. 2 - Indicate whether each of the following costs is a...Ch. 2 - For each case below, find the missing amount.Ch. 2 - A foundry employee worked a normal 40-hour shift,...Ch. 2 - A loom operator in a textiles factory earns 16 per...Ch. 2 - Consider the following costs that were incurred...Ch. 2 - Alexandria Aluminum Company, a manufacturer of...Ch. 2 - Prob. 30ECh. 2 - A hotel pays the phone company 100 per month plus...Ch. 2 - Prob. 32ECh. 2 - Orbital Communications, Inc. manufactures...Ch. 2 - The state Department of Education owns a computer...Ch. 2 - Prob. 35ECh. 2 - List the costs that would likely be included in...Ch. 2 - Consider the following cost items: 1. Salaries of...Ch. 2 - The following selected information was extracted...Ch. 2 - Prob. 39PCh. 2 - Mason Corporation began operations at the...Ch. 2 - Determine the missing amounts in each of the...Ch. 2 - The following cost data for the year just ended...Ch. 2 - The following data refer to San Fernando Fashions...Ch. 2 - Highlander Cutlery manufactures kitchen knives....Ch. 2 - Cape Cod Shirt Shop manufactures T-shirts and...Ch. 2 - Heartland Airways operates commuter flights in...Ch. 2 - San Diego Sheet Metal, Inc. incurs a variable cost...Ch. 2 - Hightide Upholstery Company manufactures a special...Ch. 2 - For each of the following costs, indicate whether...Ch. 2 - Indicate for each of the following costs whether...Ch. 2 - Water Technology, Inc. incurred the following...Ch. 2 - The following terms are used to describe various...Ch. 2 - Several costs incurred by Bayview Hotel and...Ch. 2 - Refer to Exhibit 23, and answer the following...Ch. 2 - Roberta Coy makes custom mooring covers for boats....Ch. 2 - The Department of Natural Resources is responsible...Ch. 2 - Prob. 57PCh. 2 - Prob. 58PCh. 2 - CompTech, Inc. manufactures printers for use with...Ch. 2 - You just started a summer internship with the...
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