(Cost control activities) Ms. Renwick has just been appointed as the new director of Youth Hot-Line, a...
Question:
(Cost control activities) Ms. Renwick has just been appointed as the new director of Youth Hot-Line, a not-for-profit organization that operates a phone bank for individuals experiencing emotional difficulties. The phones are staffed by qual¬ ified social workers and psychologists who are paid on an hourly basis. Ms. Renwick took the following actions in the first week at Youth Hot-Line. Indicate whether the actions represent cost understanding, cost containment, cost avoid¬ ance, or cost reduction. Some actions may have more than one implication; if they do, indicate the reason.
a. Increased the budget appropriation for advertising of the Hot-Line.
b. Exchanged the more expensive pushbutton, cream-colored designer tele¬ phones for regular, pushbutton desk telephones.
c. Eliminated the call-forwarding feature installed on all telephones because Youth Hot-Line will now be staffed 24 hours a day.
d. Eliminated two paid clerical positions and replaced these individuals with volunteers.
e. Ordered blank notepads for the counselors to keep by their phones; the old notepads (stock now depleted) had the Youth Hot-Line logo and address printed on them.
f. Negotiated a new contract with the telephone company; Youth Hot-Line will now pay a flat rate of $100 per month, regardless of the number of telephones installed by the Hot-Lme. The previous contract charged the organization $10 for every telephone. At the time that contract was signed, Youth Hot-Line only had ten telephones. With the increased staff, Ms. Ren¬ wick plans to install at least five additional telephones.
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