Hart Company sells and delivers office furniture across Western Canada. The costs associated with the acquisition...
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Hart Company sells and delivers office furniture across Western Canada. The costs associated with the acquisition and annual operation of a delivery truck are given below: $2,007 $ 195 24 Garage rent for parking (per truck) $ 1,180 $4,900 Insurance Licences Taxes (vehicle). 118 Depreciation ($24,500 5 years) Gasoline, oil, tires, and repairs $ 0.18/km Required: 1. Assume that Hart Company owns one truck that has been driven 30,000 kilometres during the first year. Compute the average cost per kilometre of owning and operating the truck. (Round your answer to 2 decimal places.) Average cost per kilometre 2. Not available in Connect. 3. Assume that the company decides to use the truck during the second year. Near year- end, an order is received from a customer over 1,000 kilometers away. What costs from the previous list are relevant in a decision between using the truck to make the delivery and having the delivery done commercially? (Round your answer to 2 decimal places.) Relevant cost per kilometre 4. Occasionally, the company could use two trucks at the same time. For this reason, some thought is being given to purchasing a second truck. The total kilometers driven would be the same as if only one truck were owned. What costs from the previous list are relevant to a decision about whether to purchase the second truck? Relevant cost Hart Company sells and delivers office furniture across Western Canada. The costs associated with the acquisition and annual operation of a delivery truck are given below: $2,007 $ 195 24 Garage rent for parking (per truck) $ 1,180 $4,900 Insurance Licences Taxes (vehicle). 118 Depreciation ($24,500 5 years) Gasoline, oil, tires, and repairs $ 0.18/km Required: 1. Assume that Hart Company owns one truck that has been driven 30,000 kilometres during the first year. Compute the average cost per kilometre of owning and operating the truck. (Round your answer to 2 decimal places.) Average cost per kilometre 2. Not available in Connect. 3. Assume that the company decides to use the truck during the second year. Near year- end, an order is received from a customer over 1,000 kilometers away. What costs from the previous list are relevant in a decision between using the truck to make the delivery and having the delivery done commercially? (Round your answer to 2 decimal places.) Relevant cost per kilometre 4. Occasionally, the company could use two trucks at the same time. For this reason, some thought is being given to purchasing a second truck. The total kilometers driven would be the same as if only one truck were owned. What costs from the previous list are relevant to a decision about whether to purchase the second truck? Relevant cost
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HART COMPANY 1 Calculation of per KM cost of owning and operating the truck ... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1259024900
9th canadian edition
Authors: Ray Garrison, Theresa Libby, Alan Webb
Posted Date:
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