The University Computer Lab Is Having Difficulty Controlling Its Costs

question 6

Multiple Choice

The university computer lab is having difficulty controlling its costs.Analysis showed that a key issue is the cost of printer supplies (ink,paper,and machine repair) .Which strategy is likely to reduce costs the most,if typical student use is 200 copies per month?

• A)Plan A: requiring students to pay 12 cents per copy
• B)Plan B: charging a fee of $20 for the first 100 copies per month,then 10 cents per copy thereafter
• C)Plan C: charging a fee of $10 for the first 50 copies per month,then 15 cents per copy thereafter
• D)Plan D: adding a flat lab fee of $30 per academic term
• E)All of the choices are correct

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Definitions:

Double Declining Balance Method

An accelerated depreciation method that doubles the straight-line depreciation rate, allowing for more depreciation in the early years of an asset's life.

Activity Method

An approach to calculating depreciation for an asset based on its actual usage, wear and tear, rather than an arbitrary time frame.

Depreciation Expense

Systematically dividing the cost of a tangible asset over its estimated useful life.