As CEO of SeaSpray Marine, Rachel Souve knows it is important to control costs and to respond quickly to changes in the highly competitive boat-building industry. When IDG Consulting proposes thatSeaSpray Marine invest in an ERP system, she forms a team to evaluate the proposal: the plant engineer, the plant foreman, the systems specialist, the human resources director, the marketing director, and themanagement accountant. A month later, management accountant Mike Chumura reports that the team and IDG estimate that if SeaSpray Marine implements the ERP system, it will incur the following costs:i (Click the icon to view SeaSpray's anticipated project costs.)The team estimates that the ERP system should provide several benefits:i (Click the icon to view SeaSpray's anticipated project benefits.)Read the requirements.Requirement 1. If the ERP installation succeeds, what is the dollar amount of the benefits?If the ERP installation succeeds, the dollar amount of the benefits isRequirement 2. Should SeaSpray Marine install the ERP system? Why or why not? Show your calculations.Complete the table below to calculate the expected net benefits (costs) of the project. (Use parentheses or a minus sign for net costs.)Expected benefitsExpected costsNet benefits (costs)Since the expected value of the benefitsthe total costs, SeaSprayundertake the project. More infoBenefits of the Projecta. More efficient order processing should lead to savings of $185,000.b. Streamlining the manufacturing process so that it maps into the ERP systemwill create savings of $265,000.c. Integrating purchasing, production, marketing, and distribution into a singlesystem will allow SeaSpray Marine to reduce inventories, saving $230,000.Higher customer satisfaction should increase sales, which, in turn, shouldincrease profits by $140,000.d.PrintDoneMore infoCosts of the Projecta. $390,000 in software costsb. $85,000 to customize the ERP software and load SeaSpray's data into the newERP systemc. $105,000 for employee trainingPrintDonethe project.hent 3. Why did Souve create a team to evaluate IDG's proposal? Consider each piece of cost-benefit information that management accountant Chumura reported. Which person on the team is most

Enterprise Resource Planning (ERP) is business management software that integrates various…

Benefits of the Project a. More efficient order processing should lead to savings of $185,000. b. Streamlining the manufacturing process so that it maps into the ERP system will create savings of $265,000. c. Integrating purchasing, production, marketing, and distribution into a single system will allow SeaSpray Marine to reduce inventories, saving $230,000. Higher customer satisfaction should increase sales, which, in turn, should increase profits by $140,000. d. Print Done More info Costs of the Project a. $390,000 in software costs b. $85,000 to customize the ERP software and load SeaSpray's data into the new ERP system c. $105,000 for employee training the project. Print Done

Benefits of the Project a. More efficient order processing should lead to savings of $185,000. b. Streamlining the manufacturing process so that it maps into the ERP system will create savings of $265,000. c. Integrating purchasing, production, marketing, and distribution into a single system will allow SeaSpray Marine to reduce inventories, saving $230,000. Higher customer satisfaction should increase sales, which, in turn, should increase profits by $140,000. d. Print Done More info Costs of the Project a. $390,000 in software costs b. $85,000 to customize the ERP software and load SeaSpray's data into the new ERP system c. $105,000 for employee training the project. Print Done

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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