Economic Feasibility Is Concerned With

question 101

Multiple Choice

Economic feasibility is concerned with:

• A) How well a proposed information system supports the objectives of the organization and its strategic plan for information systems
• B) Whether expected cost savings, increased revenue, increased profits, reductions in required investment, and other types of benefits will exceed the cost of developing and operating a proposed system
• C) Determining if reliable hardware and software capable of meeting the needs of a proposed system can be acquired or developed by the business in the required time
• D) The willingness and ability of management, employees, customers, suppliers, and others to operate, use, and support a proposed system

Learn the impact of depreciation on financial statements and cash flow.

Recognize various depreciation methods and their application to different asset types.

Comprehend the treatment of ordinary maintenance versus improvement expenditures.

Understand the accounting treatment of leased assets and their presentation on the balance sheet.

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Definitions:

Machine-Hours

An indicator of how much is produced or the level of activity in manufacturing, determined by the total hours that machinery is in use during the production process.

Job-Order Costing

A costing method used to calculate the production costs of individual units or batches of products, making it especially useful for customized orders in manufacturing or service industries.

Plantwide Overhead Rate

An overhead allocation rate applied uniformly to all products or services based on overall plant activity, ignoring individual departmental differences.

Direct Labor-Hours

Refers to the measurable amounts of work effort contributed directly by laborers on the manufacturing floor towards the production of goods.