Singh Concrete Company owns enough ready-mix trucks to deliver up to 100,000 cubic metres of concrete per
Question:
Singh Concrete Company owns enough ready-mix trucks to deliver up to 100,000 cubic metres of concrete per year (considering each truck's capacity, weather, and distance to each job). Total truck depreciation is $200,000 per year. Raw materials (cement, gravel, and so on) cost about $25 per cubic metre of cement.
Required:
1. Prepare a graph for truck depreciation. Use the vertical axis for cost and the horizontal axis for cubic metres of cement.
2. Prepare a graph for raw materials. Use the vertical axis for cost and the horizontal axis for cubic metres of cement.
3. Assume that the normal operating range for the company is 90,000 to 96,000 cubic metres per year. Classify truck depreciation and raw materials as variable or fixed costs.
Step by Step Answer:
Cornerstones of Managerial Accounting
ISBN: 978-0176530884
2nd Canadian edition
Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman