The Sorrento Hotel is a four-star hotel in downtown Montreal. The hotel\'s opera
ID: 2604097 • Letter: T
Question
The Sorrento Hotel is a four-star hotel in downtown Montreal. The hotel's operations vice president would like to replace the hotel's antiquated computer terminals at the registration desk with attractive state-of-the- art flat-panel displays. The new displays would take less space; consume less power; and provide additional security, since they can be viewed only from a restrictive angle. The new computer displays would not require any new wiring. The hotel's chef believes the funds would be better spent on a new bulk freezer for the kitchen. Required: Classify each item as a differential cost, an opportunity cost, or a sunk cost in the decision to replace the old computer terminals with new flat-panel displays. If none of the categories apply for a particular item, select "None". Cost Differential Cost 2. Item Ex. Cost of electricity to run the terminals |Cost of the new flat-panel displays |Cost of the old computer terminals 3. Rent on the space occupied by the registration desk 4. Wages of registration desk personnel 5. Benefits from a new freezer |Costs of maintaining the old computer terminals Cost of removing the old computer terminals 8. |Cost of existing registration desk wiringExplanation / Answer
Answer:
Type of Cost
Cost Item
Ex.
Cost of electricity to run the terminals
Differential
1
Cost of the new flat-panel displays
Differential
2
Cost of the old computer terminals
Sunk
3
Rent on the space occupied by the registration desk
Sunk
4
Wages of the registration desk personnel
None
5
Benefits from a new freezer
Opportunity
6
Costs of maintaining the old computer terminals
Differential
7
Cost of removing the old computer terminals
Differential
8
Cost of existing registration desk wiring
Sunk
Type of Cost
Cost Item
Ex.
Cost of electricity to run the terminals
Differential
1
Cost of the new flat-panel displays
Differential
2
Cost of the old computer terminals
Sunk
3
Rent on the space occupied by the registration desk
Sunk
4
Wages of the registration desk personnel
None
5
Benefits from a new freezer
Opportunity
6
Costs of maintaining the old computer terminals
Differential
7
Cost of removing the old computer terminals
Differential
8
Cost of existing registration desk wiring
Sunk
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.