E10-4b (purchase and self-constructed cost of assets) dade co. both

E10-4B (Purchase and Self-Constructed Cost of Assets) Dade Co. both purchases and constructs various

equipment it uses in its operations. The following items for two different types of equipment were recorded in random order during the calendar year 2014.

Purchase

Cost to hire technicians to test equipment $ 10,000

Cash paid for equipment, including sales tax of $31,000 522,500

Freight and insurance cost while in transit 7,000

Cost of moving equipment into place at factory 2,850

Special electrical wiring required for new equipment 3,200

Repair cost incurred in first year of operations related to this equipment 500

Insurance premium paid during first year of operation on this equipment 1,500

Construction

Cost of installing equipment $ 6,500

Material and purchased parts (gross cost $100,000; failed to take 2% cash discount) 100,000

Labor costs 76,700

Allocated overhead costs (fixed—$11,000; variable—$17,000) 28,000

Imputed interest on funds used during construction (stock financing) 7,500

Profit on self-construction 52,600

Instructions

Compute the total cost for each of these two pieces of equipment. If an item is not capitalized as a cost

of the equipment, indicate how it should be reported.

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Next to these stages, there are four types of loyalty. The first type is no loyalty: this can be seen as the typical action supporter that is giving money to fundraiser friends/family. There is no connection between the action supporter and War Child, non-loyal customers add a small amount to the financial account of the organization. The second type is inertia loyalty: this type can be a potential Friend, the person is giving a donation because they always have done it. This person is not loyal to one charity because there is no deeper connection and is easy with switching from charity to charity. This person is reachable to get a deeper connection with to become a potential Friend. It is needed to give the potential Friend attention and please the person. The third type is latent loyalty: this type is based on situational influences such as time, social life, physical factors, reasons why to support charity and the mood of the person. Latent loyalty means that there are repeated purchases. The last type is premium loyalty: this is the greatest type an organization can get. This type indicates the loyal Friend who is proud to discover more and tell about War Child to everyone. (Griffin, 2010) Using the stages and types of loyalty, War Child will get a better understanding about their potential Friends. Increased loyalty can give benefits to more respects of the company. Increased loyalty will be cost saving because there will be reduced marketing costs, more positive word-of-mouth, satisfied loyal customers whereby the failure costs decrease. (Griffin, 2010) 1.2.4 Customer relationship management Kotler (2014, p. 9) stated in the book ‘’Principles of marketing’’ that customer relationship management (CRM) can be mentioned as delivering superior customer value and satisfaction by building and maintaining profitable customer relationships. (Kotler, 2014) Using a suitable approach for the action supporters will lead to charitable giving. To build and maintain profitable customer relationships, customer relationship management need to be implemented. It is very important to deliver customer value and make the action supporters satisfied. By doing this,>

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