The state Department of Education owns a computer system, which its employees use for word processing and keeping track of education statistics. The governor’s office recently began using this computer also. As a result of the increased usage, the demands on the computer soon exceeded its capacity. The director of the Department of Education was soon forced to lease several personal computers to meet the computing needs of her employees. The annual cost of leasing the equipment is $14,000.Required:1. What type of cost is this $14,000?2. Should this cost be associated with the governor’s office or the Department of Education? Why?

The state Department of Education owns a computer system, which its employees use for word processing and keeping track of education statistics. The governor’s office recently began using this computer also. As a result of the increased usage, the demands on the computer soon exceeded its capacity. The director of the Department of Education was soon forced to lease several personal computers to meet the computing needs of her employees. The annual cost of leasing the equipment is $14,000.Required:1. What type of cost is this $14,000?2. Should this cost be associated with the governor’s office or the Department of Education? Why?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter15: Choice Of Business Entity—other Considerations

Section: Chapter Questions

Problem 71P

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he state Department of Education owns a computer system, which its employees use for word processing and keeping track of education statistics. The governor’s office recently began using this computer also. As a result of the increased usage, the demands on the computer soon exceeded its capacity. The director of the Department of Education was soon forced to lease several personal computers to meet the computing needs of her employees. The annual cost of leasing the equipment is $14,000. Required: 1. What type of cost is this $14,000? 2. Should this cost be associated with the governor’s office or the Department of Education? Why?
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