The document discusses a hospital considering replacing its old, inefficient X-ray machine with a new digital X-ray machine. The new machine would provide higher quality X-rays faster and at a lower cost, but require less power. It would also use color laser printing. Meanwhile, the laboratory department wants funds for a new DNA analyzer instead. A table then classifies various costs as differential, opportunity, or sunk costs regarding replacing the X-ray machine.
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The document discusses a hospital considering replacing its old, inefficient X-ray machine with a new digital X-ray machine. The new machine would provide higher quality X-rays faster and at a lower cost, but require less power. It would also use color laser printing. Meanwhile, the laboratory department wants funds for a new DNA analyzer instead. A table then classifies various costs as differential, opportunity, or sunk costs regarding replacing the X-ray machine.
The document discusses a hospital considering replacing its old, inefficient X-ray machine with a new digital X-ray machine. The new machine would provide higher quality X-rays faster and at a lower cost, but require less power. It would also use color laser printing. Meanwhile, the laboratory department wants funds for a new DNA analyzer instead. A table then classifies various costs as differential, opportunity, or sunk costs regarding replacing the X-ray machine.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOC, PDF, TXT or read online from Scribd
The document discusses a hospital considering replacing its old, inefficient X-ray machine with a new digital X-ray machine. The new machine would provide higher quality X-rays faster and at a lower cost, but require less power. It would also use color laser printing. Meanwhile, the laboratory department wants funds for a new DNA analyzer instead. A table then classifies various costs as differential, opportunity, or sunk costs regarding replacing the X-ray machine.
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EXERCISE 2-7 DIFFERENTAIL, OPPORTUNITY ,AND SUNK
Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics.The hospital’s Radiology Department is considering replacing an old inefficient X-ray machine with a state-of-the-art- digital X- ray machine.The new machine would provide higher quality X-rayin less time and at a lower cost per X-ray.It would also require less power and would use a color laser printer to produce easily readable X-ray images.Instead of inversting the funds in the new X-ray machine,the Laboratory Department is lobbying the Hospital’s management to buy a new DNA analyzer.
Required
For each of the items below,indicate by placing an X in the appropriate column whether it should be considered a differential cost,an opportuniy cost, or a sunk cost in the dicision to replace the old X-ray machine with a new machine.If none of the categories apply for a particular item, leave all column blank.
ITEM DIFFERENTAIL OPPORTUNITY SUNK COST
ITEM COST Ex:Cost of X-ray film used in the old X machine.
1)Cost of the old X-
ray machine X
2)The salary of the
head of the Radiology Department X
3)The salary of the
head of the Pediatrics Department. X
4)Cost of the new
color laser printer X
5)Rent on the space
occupied by Radiology. X
6)The cost of maintaining the old machine. X 7)Benefit from a new DNA analyzer. X
