It Is Determined That a Mobile Application Needed to Support

question 65

Essay

It is determined that a mobile application needed to support the Sales, Marketing, and Finance departments will cost $60,000. The Sales department has 20 employees and all employees will need the application. Likewise, all 10 of the Marketing department employees will need the application. Only one-third of the Finance department is interested in the mobile application. The Finance department has 30 employees. The CIO has decided to fund the mobile application using either the allocation method or chargeback method.
Which funding method does each department wish the CIO will choose to use and why?

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Definitions:

Dissolved

The process of legally dissolving a corporation or partnership, effectively ending its existence.

Close Corporation

A business structure characterized by a small number of shareholders, no need for formal board meetings, and less stringent regulatory requirements.

Managerial Control

A theory of corporate management that favors insulating managers from shareholders by limiting the shareholders’ power to vote and by making it difficult for the shareholder to sue managers.

Outstanding Shares

Represents the total number of shares of a corporation's stock that are currently owned by all shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s insiders.