Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
WWWeb Marketing is a decentralized firm specializing in designing and operating Internet marketing Web sites. The firm is four years old and has been growing rapidly, but it only shows a small profit. WWWeb has three profit centers: Design Division, Server Operations, and the Crawler Division. The Design Division devises Internet marketing strategies for external clients, including innovative Web sites and Web-based marketing strategies. Server Operations maintains the clients' Web sites on WWWeb's servers. The Crawler Division operates WWWeb's proprietary search engine tha clients can use for Internet-based marketing research. In addition to these three profit centers, WWWeb has an IT group that maintains WWWeb's servers and telecommunication lines to the Internet. The IT group is a cost center. The current annual IT budget is $548,000 for personnel, hardware and software leases for the servers, and telecommunication costs. The cost of the IT group is not allocated back to the three divisions. The CEO of WWWeb argues that the IT group is a common (shared) resource and is essentially a fixed cost. Adding another client Web site or performing a Web search does not generate any additional IT cost to the firm because WWWeb's IT group has excess capacity. WWWeb's CEO argues, "Any charge for IT back to the divisions will cause the divisions to avoid using our IT resources. As long as we have unused capacity on our systems we should be encouraging our people to use that capacity." WWWeb currently uses about 80 percent of the capacity of its servers, routers, and fiber optic high speed lines to the Internet. The high speed lines are the "pipes" through which all client server Web traffic flows. These high speed lines are also used by WWWeb's email traffic and tbe Crawler Divisions marketing research Web searches. Currently, the IT systems are performing well and WWWeb users experience few delays and minimal interference from other users. However, the three profit center managers are projecting growth in their businesses and expect to reach capacity on their servers and communication lines within the next 12 months. When this happens, the managers predict that they will experience significant service degradation. Jose Coronas, head of WWWeb's IT group, has called a meeting of the three division managers to discuss the terrific deals being offered by telecom companies and hardware providers. Given the current slump in the economy, WWWeb can roughly double the capacity of its servers and high speed access lines and lock in these new low rates for two years. The incremental cost of doubling the IT group's capacity is to raise it's hardware lease costs and access line costs by 20 percent. IT currently spends $18,000 a month on hardware leases and access lines. If it were to double its existing capacity, the total monthly cost would rise to $21,600. Mr. Corona believes his existing IT personnel can handle the additional server and line capacity. Coronas and the three division managers recommend that WWWeb acquire the additional capacity and lock in these attractive rates. Required: a. Analyze WWWeb's current policy on how the three divisions are charged for IT costs and whether WWWeb should acquire the additional capacity. b. Should WWWeb change its policy of how it charges IT costs to the divisions? If so, what changes would you recommend?
the deleca plastice company is considering a machine that has a cost of 25000. the machine will permit an output
Keith Bowie is trying to determine the amount to set aside so that he will have enough money on hand in 2 years to overhaul the engine on his vintage used car.
keelson enterprises manufactures automobiles and occasionallymakes small investments in other corporations for
1. list and describe at least three users of a firms accounting information. be specific about how they use the
derf company applies overhead on the basis of direct labor hours. two direct labor hours are required for each product
computer systems often sells merchandise in exchange for interest bearing notes receivable maturing in 6 12 or 24
Compute the equivalent units of production for the first department for June, assuming that the company uses the weighted-average method of accounting for units and costs.
on march 31 2014 roseo company paid 6000000 to acquire all of the common stock of drive incorporated which became a
Prepare Harley-Davidson's statement of cash flows for the year ended December 31, 2004.
how much investment per dollar of expected annual operating savings can a company afford if the investment has an
Muriel, age 70 and single, is claimed as a dependent on her daughter's tax return. During 2009, she had interest income of $2,400 and $800 of earned income from babysitting. Muriel's taxable income is what?
the following labor standards have been established for a particular productstandard hours per unit 1.7
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd