A motor carrier is trying to determine its cost to pick up a shipment originating in Hot Springs, AR. The carrier dispatches a truck and trailer from Little Rock to pick up the load in Hot Springs. Little Rock is 50 miles from Hot Springs and the trip takes 1 hour. The driver arrives at the shipper and waits for 2 hours while the trailer is loaded. For this exercise the carrier is only concerned with the cost of driving from the terminal to Hot Springs and picking up the load (i.e., does not care about line-haul and delivery costs). Assume there are 30 days in a month. Use the information provided in the following table to determine how much it cost the carrier to pick up this load from Hot Springs: Equipment Purchase Price Tractor $80,000 (Monthly payment - $1,584) Trailer $35,000 (Monthly payment - $406) Depreciation Tractor 5-year straight line Trailer 10-year straight line Interest Tractor 7% APR for 5 years Trailer 7% APR for 10 years Fuel S5.00/gallon for diesel and the tractor gets 6,5 mpg Labor Cost Driver $0.40 per mile Miscellaneous Insurance cost $0.03 per mile Maintenance cost $0.15 per mile Billing cost $1.95 per pick up Depreciation expense equipment cost/depreciation years/days in a year/hours in a day Interest expense - monthly payment/days in a month hours in a day Fuel expense fuel cost per gallon/equipment miles per gallon What is the total depreciation expense for this pick-up? What is the total fuel cost for this pick-up? What is the total cost for this pick-up? How much would the carrier need to charge per mile to break-even on this pick-up? A motor carrier is trying to determine its cost to pick up a shipment originating in Hot Springs, AR. The carrier dispatches a truck and trailer from Little Rock to pick up the load in Hot Springs. Little Rock is 50 miles from Hot Springs and the trip takes 1 hour. The driver arrives at the shipper and waits for 2 hours while the trailer is loaded. For this exercise the carrier is only concerned with the cost of driving from the terminal to Hot Springs and picking up the load (i.e., does not care about line-haul and delivery costs). Assume there are 30 days in a month. Use the information provided in the following table to determine how much it cost the carrier to pick up this load from Hot Springs: Equipment Purchase Price Tractor $80,000 (Monthly payment - $1,584) Trailer $35,000 (Monthly payment - $406) Depreciation Tractor 5-year straight line Trailer 10-year straight line Interest Tractor 7% APR for 5 years Trailer 7% APR for 10 years Fuel S5.00/gallon for diesel and the tractor gets 6,5 mpg Labor Cost Driver $0.40 per mile Miscellaneous Insurance cost $0.03 per mile Maintenance cost $0.15 per mile Billing cost $1.95 per pick up Depreciation expense equipment cost/depreciation years/days in a year/hours in a day Interest expense - monthly payment/days in a month hours in a day Fuel expense fuel cost per gallon/equipment miles per gallon What is the total depreciation expense for this pick-up? What is the total fuel cost for this pick-up? What is the total cost for this pick-up? How much would the carrier need to charge per mile to break-even on this pick-up
