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Problem 6 Listed below are several costs incurred by the loan department of J P Morgan and Chase Bank. For each cost, indicate which of the following classification best describe the cost. More than one classification may apply to the same cost item. Cost classification a. Controllable by the loan department b. Uncontrollable by the loan department Direct cost of the loan department d. Indirect cost of the loan department Differential cost c. e. f. Marginal cost g. Opportunity cost h. Sunk cost i. Out-of-pocket cost Cost items 1. Salary of the loan department manager 2. Salary of a loan department clerk Cost of office supplies used in the loan department 3. 4. Cost of the department's personal computer purchased by the department manager last year. 5. Cost of general advertising by the bank, which is allocated to the loan department. 6. Revenue that the loan department would have generated for the bank if a branch loan office had been located downtown instead of in the next province. 7. Difference in the cost incurred by the bank when one application loan application is processed. Cost of electricity allocated to the loan department. Price of office supplies purchased and used by the loan department. 10. Depreciation of the office equipment used in the loan department. 8. 9.

Problem 6 Listed below are several costs incurred by the loan department of J P Morgan and Chase Bank. For each cost, indicate which of the following classification best describe the cost. More than one classification may apply to the same cost item. Cost classification a. Controllable by the loan department b. Uncontrollable by the loan department Direct cost of the loan department d. Indirect cost of the loan department Differential cost c. e. f. Marginal cost g. Opportunity cost h. Sunk cost i. Out-of-pocket cost Cost items 1. Salary of the loan department manager 2. Salary of a loan department clerk Cost of office supplies used in the loan department 3. 4. Cost of the department's personal computer purchased by the department manager last year. 5. Cost of general advertising by the bank, which is allocated to the loan department. 6. Revenue that the loan department would have generated for the bank if a branch loan office had been located downtown instead of in the next province. 7. Difference in the cost incurred by the bank when one application loan application is processed. Cost of electricity allocated to the loan department. Price of office supplies purchased and used by the loan department. 10. Depreciation of the office equipment used in the loan department. 8. 9.

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 14.3E
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Problem 6 Listed below are several costs incurred by the loan department of J P Morgan and Chase Bank. For each cost, indicate which of the following classification best describe the cost. More than one classification may apply to the same cost item. Cost classification Controllable by the loan department Uncontrollable by the loan department Direct cost of the loan department Indirect cost of the loan department а. b. C. d. е. Differential cost Marginal cost g. Opportunity cost f. h. Sunk cost i. Out-of-pocket cost Cost items Salary of the loan department manager Salary of a loan department clerk Cost of office supplies used in the loan department Cost of the department's personal computer purchased by the department manager last year. Cost of general advertising by the bank, which is allocated to the loan department. Revenue that the loan department would have generated for the bank if a branch loan office had been located downtown instead of in the next province. Difference in the cost incurred by the bank when one application loan application is processed. Cost of electricity allocated to the loan department. Price of office supplies purchased and used by the loan department. 10. Depreciation of the office equipment used in the loan department. 1. 2. 3. 4. 5. 6. 7. 8. 9.
Transcribed Image Text:Problem 6 Listed below are several costs incurred by the loan department of J P Morgan and Chase Bank. For each cost, indicate which of the following classification best describe the cost. More than one classification may apply to the same cost item. Cost classification Controllable by the loan department Uncontrollable by the loan department Direct cost of the loan department Indirect cost of the loan department а. b. C. d. е. Differential cost Marginal cost g. Opportunity cost f. h. Sunk cost i. Out-of-pocket cost Cost items Salary of the loan department manager Salary of a loan department clerk Cost of office supplies used in the loan department Cost of the department's personal computer purchased by the department manager last year. Cost of general advertising by the bank, which is allocated to the loan department. Revenue that the loan department would have generated for the bank if a branch loan office had been located downtown instead of in the next province. Difference in the cost incurred by the bank when one application loan application is processed. Cost of electricity allocated to the loan department. Price of office supplies purchased and used by the loan department. 10. Depreciation of the office equipment used in the loan department. 1. 2. 3. 4. 5. 6. 7. 8. 9.
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