42. (Cost changes) Alyssa Enterprises has been in existence since 1996. The company board of directors is interested in how well certain office costs have been controlled from 1996 to 2001. Following are several cost categories and the related 1996 and 2001 expenditures:

Cost Category 1996 Cost 2001 Cost Wages and fringe benefits $160,000 $125,000 Supplies 50,000 85,000 Equipment depreciation 36,000 58,000 Utilities 4,800 6,600 Over this five-year period, Alyssa Enterprises has downsized from eight office staff to five and made substantial investments in computer hardware and software.

a. Use the above information and information in Exhibit 15–4 to prepare an alternative comparison for the board of directors relative to the office costs in these two years.

b. Write a detailed memo to provide explanations of the cost changes.