A company owner has asked his accountant to research the photocopier equipment available from vendors, and to recommend the two best equipment alternatives. The company owner will decide on one piece of equipment to purchase. The fee charged for the accountant’s research was $500. The accountant’s report produced the following information: Photocopier (A) Photocopier (B) Initial cost, including installation $6,500 $ 6,000 Economic life 5 years 5 years Scrap value at end of economic life -0- -0- Initial training cost $ 500 $ 700 Annual maintenance $ 400 $ 300 Annual wage cost $12,500 $12,500 REQUIRED Which photocopier should the company owner choose? Why? The company owner requested your help in preparing the coming year company budget. Please, guide him to the best method and appropriate type from your perspective.
A company owner has asked his accountant to research the photocopier equipment available from vendors, and to recommend the two best equipment alternatives. The company owner will decide on one piece of equipment to purchase. The fee charged for the accountant’s research was $500. The accountant’s report produced the following information: Photocopier (A) Photocopier (B) Initial cost, including installation $6,500 $ 6,000 Economic life 5 years 5 years Scrap value at end of economic life -0- -0- Initial training cost $ 500 $ 700 Annual maintenance $ 400 $ 300 Annual wage cost $12,500 $12,500 REQUIRED Which photocopier should the company owner choose? Why? The company owner requested your help in preparing the coming year company budget. Please, guide him to the best method and appropriate type from your perspective.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter17: Activity Resource Usage Model And Tactical Decision Making
Section: Chapter Questions
Problem 26P: St. Johns Medical Center (SJMC) has five medical technicians who are responsible for conducting...
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A company owner has asked his accountant to research the photocopier equipment available from vendors, and to recommend the two best equipment alternatives. The company owner will decide on one piece of equipment to purchase. The fee charged for the accountant’s research was $500. The accountant’s report produced the following information:
|
|
Photocopier (A) |
Photocopier (B) |
|
Initial cost, including installation |
$6,500 |
$ 6,000 |
|
Economic life |
5 years |
5 years |
|
Scrap value at end of economic life |
-0- |
-0- |
|
Initial training cost |
$ 500 |
$ 700 |
|
Annual maintenance |
$ 400 |
$ 300 |
|
Annual wage cost |
$12,500 |
$12,500 |
REQUIRED
- Which photocopier should the company owner choose? Why?
- The company owner requested your help in preparing the coming year company budget. Please, guide him to the best method and appropriate type from your perspective.
Evaluation and Grading:
- Your answers would be evaluated and graded based on:
- Coverage (Answers covered all points)
- Quality (Answers Relevance)
- Organization
- Originality & Creativity
- Supportive Examples
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