Managerial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134067179
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 1, Problem 1.28AP
Online order system cost-benefit analysis (Learning Objective 5)
Ferguson Gas wants to move its sales order system online. Under the proposed system, gas stations and other merchants will use a secure site to check the availability and current price of various products and place an order. Currently, customer service representatives take dealers’ orders over the phone; they record the information on a paper form, then manually enter it into the firm’s computer system.
CFO Stacey Wilson believes that dealers will not adopt the new online system unless Ferguson Gas provides financial assistance to help them purchase or upgrade their computer systems. Wilson estimates this one-time cost at $760,000. Ferguson Gas will also have to invest $160,000 in upgrading its own computer hardware. The cost of the software and the consulting fee for installing the system will be $220 000. The online system will enable Ferguson Gas to eliminate 25 clerical positions. Wilson estimates that the benefits of the new system’s lower labor costs will have saved the company $1,340,000.
Requirements
Use a cost-benefit analysis to recommend to Wilson whether Ferguson Gas should proceed with the online ordering system. Give your reasons, showing supporting calculations.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A college's food operation has an average meal price of $9.20. Variable costs are $4.35 per meal and fixed costs total $95,000. How many meals must be sold to provide an operating income of $33,000? How many meals would have to be sold if fixed costs declined by 23%? (round to the nearest meal) answer
Quick answer of this accounting questions
Baltimore Company reports total assets and total liabilities of $236,000 and $115,000, respectively, at the conclusion of its first year of business. The company earned $75,500 during the first year, and distributed $31,000 to shareholders as dividends. How much did shareholders initially invest in the business?
Chapter 1 Solutions
Managerial Accounting, Student Value Edition (5th Edition)
Ch. 1 - (Learning Objective 1) Which of the following...Ch. 1 - (Learning Objective 2) Managerial accounting...Ch. 1 - (Learning Objective 3) Which of the following...Ch. 1 - (Learning Objective 3) Of the following skills,...Ch. 1 - (Learning Objective 4) Which of the following...Ch. 1 - Prob. 6QCCh. 1 - Prob. 7QCCh. 1 - Prob. 8QCCh. 1 - (Learning Objective 5) Which of the following is...Ch. 1 - (Learning Objective 5) All of the following are...
Ch. 1 - Managers responsibilities (Learning Objective 1)...Ch. 1 - Contrast managerial and financial accounting...Ch. 1 - Prob. 1.3SECh. 1 - Prob. 1.4SECh. 1 - Prob. 1.5SECh. 1 - Prob. 1.6SECh. 1 - Violations of ethical standards (Learning...Ch. 1 - Identify current competitive tools (Learning...Ch. 1 - Identify ethical standards violated (Learning...Ch. 1 - Define key terms (Learning Objectives 1, 2, 3, 4,...Ch. 1 - Define key terms (Learning Objectives 1 2)...Ch. 1 - Prob. 1.12AECh. 1 - Identify users of accounting information (Learning...Ch. 1 - Classify ethical responsibilities (Learning...Ch. 1 - Equipment purchase cost-benefit analysis (Learning...Ch. 1 - Lean production cost-benefit analysis (Learning...Ch. 1 - Identify sustainability efforts as impacting...Ch. 1 - Prob. 1.18BECh. 1 - Prob. 1.19BECh. 1 - Identify users of accounting information (Learning...Ch. 1 - Classify ethical responsibilities (Learning...Ch. 1 - Equipment purchase cost-benefit analysis (Learning...Ch. 1 - Lean production cost-benefit analysis (Learning...Ch. 1 - Prob. 1.24BECh. 1 - Management processes and accounting information...Ch. 1 - Ethical dilemmas (Learning Objective 4) Barb Perot...Ch. 1 - ERP cost-benefit analysis (Learning Objective 5)...Ch. 1 - Online order system cost-benefit analysis...Ch. 1 - Continuation of P1-28A: revised estimates...Ch. 1 - Management processes and accounting information...Ch. 1 - Ethical dilemmas (Learning Objective 4) ETHICS...Ch. 1 - ERP cost-benefit analysis (Learning Objective 5)...Ch. 1 - Online order system cost-benefit analysis...Ch. 1 - Continuation of P1-33B: revised estimates...Ch. 1 - Discuss how managerial accounting can be used at...Ch. 1 - Discussion Questions 1. What are the three main...Ch. 1 - Prob. 1.37ACTCh. 1 - Prob. 1.38ACTCh. 1 - Ethics and casual conversations (Learning...Ch. 1 - Using managerial accounting information to manage...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- TOKYO ended the year with an inventory of $935,000. During the year, the firm purchased $6,378,000 of new inventory and the cost of goods sold reported on the income statement was $6,109,000. What was TOKYO's inventory at the beginning of the year?arrow_forwardThe Schraeger Company has estimated that sales for next quarter would be 30,000 units. The company has a beginning finished goods inventory of 2,000 units and wishes to have a finished goods inventory of 5,000 units at the end of the quarter. How many units must the company products in order to have its desired ending inventory? A. 33,000 units B. 37,000 units C. 30,000 units D. 27,000 unitsarrow_forwardAnswer this general accounting problemarrow_forward
- A firm has net working capital of $980, net fixed assets of $4,418, sales of $9,250, and current liabilities of $1,340. How many dollars worth of sales are generated from every $1 in total assets? a. $2.92 b. $1.81 c. $2.36 d. $1.50 e. $1.37 please answer this questionarrow_forward1. Sales 200,000 2. Cogm 62,000 3. Direct material Purchased 80,000arrow_forwardWhich of the following expresses the key elements of the statement of owners' equity?arrow_forward
- A college's food operation has an average meal price of $9.20. Variable costs are $4.35 per meal and fixed costs total $95,000. How many meals must be sold to provide an operating income of $33,000? How many meals would have to be sold if fixed costs declined by 23%? (round to the nearest meal)arrow_forwardIf the contribution margin ratio for Vera Company is 28%, sales were $1,135,000, and fixed costs were $297,420, what was the income from operations?arrow_forwardA firm has net working capital of $980, net fixed assets of $4,418, sales of $9,250, and current liabilities of $1,340. How many dollars worth of sales are generated from every $1 in total assets? a. $2.92 b. $1.81 c. $2.36 d. $1.50 e. $1.37 Answerarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Pkg Acc Infor Systems MS VISIO CDFinanceISBN:9781133935940Author:Ulric J. GelinasPublisher:CENGAGE L
Essentials Of Business AnalyticsStatisticsISBN:9781285187273Author:Camm, Jeff.Publisher:Cengage Learning,
Essentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Pkg Acc Infor Systems MS VISIO CD
Finance
ISBN:9781133935940
Author:Ulric J. Gelinas
Publisher:CENGAGE L
Essentials Of Business Analytics
Statistics
ISBN:9781285187273
Author:Camm, Jeff.
Publisher:Cengage Learning,
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Inspection and Quality control in Manufacturing. What is quality inspection?; Author: Educationleaves;https://www.youtube.com/watch?v=Ey4MqC7Kp7g;License: Standard youtube license