To Determine If an Information System Delivers Net Savings in Costs

question 96

True/False

To determine if an information system delivers net savings in costs, the cost of developing and operating the information system will need to be offset against the gains in reduced errors and paper, ink, and printing costs.

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Definitions:

Production Volumes

The quantity of goods a company produces within a given period, often used to measure operational efficiency.

High-low Method

An accounting technique used to estimate the variable and fixed components of a company's costs, based on the highest and lowest levels of activity.

Fixed Costs

Expenses that do not change in total regardless of the level of production or sales activity.

Variable Costs

Expenses that vary directly with changes in production or sales volumes, such as raw materials and direct labor costs.