Differential Sunk Opportunity Item Cost Cost Cost Ex. Cost of X-ray film used in the old machine 1. Cost of the old X-ray machine ..... 2. The salary of the head of the Radiology Department... 3. The salary of the head of the Laboratory Department. . 4. Cost of the new color laser printer..... 5. Rent on the space occupied by Radiology.. 6. The cost of maintaining the old machine . 7. Benefits from a new DNA analyzer ..... 8. Cost of electricity to run the X-ray machines...
Northeast Hospital’s Radiology Department is considering replacing an old inefficient X-ray machine with a state-of-the-art digital X-ray machine. The new machine would provide higher quality X-rays in less time and at a lower cost per X-ray. It would also require less power and would use a color laser printer to produce easily readable X-ray images. Instead of investing the funds in the new X-ray machine, the Laboratory Department is lobbying the hospital’s management to buy a new DNA analyzer.
Required:
For each of the items below, indicate by placing an X in the appropriate column whether it should be considered a differential cost, a sunk cost, or an opportunity cost in the decision to replace the old X-ray machine with a new machine. If none of the categories apply for a particular item, leave
all columns blank.
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