MyLab Accounting with Pearson eText -- Access Card -- for Managerial Accounting (My Accounting Lab)
5th Edition
ISBN: 9780134161648
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Textbook Question
Chapter 1, Problem 1.32BP
ERP cost-benefit analysis (Learning Objective 5)
As CEO of Riverside Marine, Rachel Moore knows it is important to control costs and to respond quickly to changes in the highly competitive boat-building industry. When Gerbig Consulting proposes that Riverside Marine invest in an ERP system, she forms a team to evaluate the proposal: the plant engineer, the plant foreman, the systems specialist, the human resources director, the marketing director, and the
A month later, management accountant Miles Cobalt reports that the team and Gerbig estimate that if Riverside Marine implements the ERP system, it will incur the following costs:
- a. $390,000 in software costs
- b. $85,000 to customize the ERP software and load Riverside Marine’s data into the new ERP system
- c. $112,000 for employee training
The team estimates that the ERP system should provide several benefits:
- a. More efficient order processing should lead to savings of $185,000.
- b. Streamlining the manufacturing process so that it maps into the ERP system will create savings of $255,000.
- c. Integrating purchasing, production, marketing, and distribution into a single system will allow Riverside Marine to reduce inventories, saving $215,000.
- d. Higher customer satisfaction should increase sales, which, in turn, should increase profits by $150,000.
Requirements
- 1. If the ERP installation succeeds, what is the dollar amount of the benefits?
- 2. Should Riverside Marine install the ERP system? Why or why not? Show your calculations.
- 3. Why did Moore create a team to evaluate Gerbig’s proposal? Consider each piece of cost-benefit information that management accountant Cobalt reported. Which person on the team is most likely to have contributed each item? (Hint: Which team member is likely to have the most information about each cost or benefit?)
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Chapter 1 Solutions
MyLab Accounting with Pearson eText -- Access Card -- for Managerial Accounting (My Accounting Lab)
Ch. 1 - (Learning Objective 1) Which of the following...Ch. 1 - (Learning Objective 2) Managerial accounting...Ch. 1 - (Learning Objective 3) Which of the following...Ch. 1 - (Learning Objective 3) Of the following skills,...Ch. 1 - (Learning Objective 4) Which of the following...Ch. 1 - Prob. 6QCCh. 1 - Prob. 7QCCh. 1 - Prob. 8QCCh. 1 - (Learning Objective 5) Which of the following is...Ch. 1 - (Learning Objective 5) All of the following are...
Ch. 1 - Managers responsibilities (Learning Objective 1)...Ch. 1 - Contrast managerial and financial accounting...Ch. 1 - Prob. 1.3SECh. 1 - Prob. 1.4SECh. 1 - Prob. 1.5SECh. 1 - Prob. 1.6SECh. 1 - Violations of ethical standards (Learning...Ch. 1 - Identify current competitive tools (Learning...Ch. 1 - Identify ethical standards violated (Learning...Ch. 1 - Define key terms (Learning Objectives 1, 2, 3, 4,...Ch. 1 - Define key terms (Learning Objectives 1 2)...Ch. 1 - Prob. 1.12AECh. 1 - Identify users of accounting information (Learning...Ch. 1 - Classify ethical responsibilities (Learning...Ch. 1 - Equipment purchase cost-benefit analysis (Learning...Ch. 1 - Lean production cost-benefit analysis (Learning...Ch. 1 - Identify sustainability efforts as impacting...Ch. 1 - Prob. 1.18BECh. 1 - Prob. 1.19BECh. 1 - Identify users of accounting information (Learning...Ch. 1 - Classify ethical responsibilities (Learning...Ch. 1 - Equipment purchase cost-benefit analysis (Learning...Ch. 1 - Lean production cost-benefit analysis (Learning...Ch. 1 - Prob. 1.24BECh. 1 - Management processes and accounting information...Ch. 1 - Ethical dilemmas (Learning Objective 4) Barb Perot...Ch. 1 - ERP cost-benefit analysis (Learning Objective 5)...Ch. 1 - Online order system cost-benefit analysis...Ch. 1 - Continuation of P1-28A: revised estimates...Ch. 1 - Management processes and accounting information...Ch. 1 - Ethical dilemmas (Learning Objective 4) ETHICS...Ch. 1 - ERP cost-benefit analysis (Learning Objective 5)...Ch. 1 - Online order system cost-benefit analysis...Ch. 1 - Continuation of P1-33B: revised estimates...Ch. 1 - Discuss how managerial accounting can be used at...Ch. 1 - Discussion Questions 1. What are the three main...Ch. 1 - Prob. 1.37ACTCh. 1 - Prob. 1.38ACTCh. 1 - Ethics and casual conversations (Learning...Ch. 1 - Using managerial accounting information to manage...
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