 Salaries of IT employees working exclusively on the project: R670 000  Employee awareness leaflets: R32 000  General overhead cost allocation: R123 000  Specialist consultancy service: R432 000 State what value for each of the above four expenditures will be included in the capitalised cost of the ERP system. Write down only the amounts.

 Salaries of IT employees working exclusively on the project: R670 000  Employee awareness leaflets: R32 000  General overhead cost allocation: R123 000  Specialist consultancy service: R432 000 State what value for each of the above four expenditures will be included in the capitalised cost of the ERP system. Write down only the amounts.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 19E: A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per...

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Waikiki Trading Ltd incurred the following project expenditures inrespect of a new ERP system in the development phase: Salaries of IT employees working exclusively on the project:R670 000 Employee awareness leaflets: R32 000 General overhead cost allocation: R123 000 Specialist consultancy service: R432 000State what value for each of the above four expenditures will beincluded in the capitalised cost of the ERP system. Write downonly the amounts. (If the amount to be included is NIL in youropinion, then write down NIL).
Thank you for the solution. I did not understand how you got the figure of $600,000 at the following part NPV=Annual benefitsr-Total cost=$30,0005%-($10,000+$30,000+$10,000)=$600,000-$50,000=$550,000
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