Question
A transportation company evaluates its vehicle maintenance, fuel, and driver costs over four quarters. Quarter Trips Made Maintenance Cost Cost per Trip (Maintenance) Fuel Cost
A transportation company evaluates its vehicle maintenance, fuel, and driver costs over four quarters.
| Quarter | Trips Made | Maintenance Cost | Cost per Trip (Maintenance) | Fuel Cost | Cost per Trip (Fuel) | Driver Cost | Cost per Trip (Driver) |
|---|---|---|---|---|---|---|---|
| 1 | 200 | $4,000 | $6,000 | $8,000 | |||
| 2 | 400 | $4,000 | $8,000 | $16,000 | |||
| 3 | 100 | $4,000 | $3,000 | $4,000 | |||
| 4 | 300 | $4,000 | $7,000 | $12,000 |
Required: a. Calculate the cost per trip for each cost. b. Classify each cost as fixed, variable, or mixed. c. Discuss how understanding cost behaviors can enhance trip scheduling and route planning. d. Evaluate the impact of these costs on the company’s overall profitability. e. Recommend strategies for cost reduction in vehicle maintenance, fuel, and driver expenses.
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Accounting Information Systems
Authors: Marshall B. Romney, Paul J. Steinbart
12th edition
132552620, 978-0132552622
