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Solar Construction Limited (SCL) has a cash balance of $300,000 on January 1, 2020. It produces custom-made sunrooms to size specifications set by the customer.
Solar Construction Limited (SCL) has a cash balance of $300,000 on January 1, 2020. It produces custom-made sunrooms to size specifications set by the customer. SCL has decided to upgrade its IT system to a fully automated system that it will track an order, direct the production line to produce and package the required components (steel, glass, seals) based on customer specifications, update the finished goods inventory once production is completed, delete from inventory on installation, and prepare the invoice. SCL is at the initial stages of planning this upgrade. Most of the needs analysis has been completed. The timing and cost estimates for the project are as follows: 1. Needs analysis, review of proposals, and selection of the new system October 1 to December 31, 2019 2. A system selection consultant has already been hired and will be paid $50,000 on February 15. 3. Testing of the new system March 1 to April 30 4. Implementation May 1 to June 30. This will allow the new system to be fully up and running during key construction months. Costs estimates: Hardware payable January 1 $450,000 Software 50% payable January 31; 50% payable May 31 $280,000
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