Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For a Zume Pizza delivery truck that uses a combination of robots, AI, and GPS in pizza preparation and delivery, what will be capitalized versus

For a Zume Pizza delivery truck that uses a combination of robots, AI, and GPS in pizza preparation and delivery, what will be capitalized versus expensed?

Source: http://www.zumepizza.com (Links to an external site.)Links to an external site.

Zume Pizza (Links to an external site.)Links to an external site. uses a combination of robots, artificial intelligence (AI), and GPS in its food trucks to deliver pizzas to customers houses just as the pizza is finished baking.

The process starts with a customer using Zume Pizzas app to order pizza. The pizza combinations offered by Zume have been derived by analyzing customer data to offer several popular options. These preset combination recipes are programmed into Zumes computers, so that its robots can build and bake the pizzas efficiently.

All pizza preparation and baking happens in the Zume pizza truck. Once the customer orders a pizza, a worker in the Zume food truck will toss the dough, cut the vegetables, and put on toppings. A robot will put on the pizza sauce. Each Zume pizza truck has 56 pizza ovens, which are each individually connected to the order system and the trucks GPS. A robot will put the pizza into the designated oven exactly four minutes before the truck reaches the customers house. A worker will pull out the pizza when it is finished and place it into the cutter, where a robot will cut the pizza. The pizza is boxed and the pizza is delivered to the customers door, all within a few minutes of finishing baking. Eventually, Zumes owners hope to use a robot to remove pizzas from the oven as well.

Zume Pizza is based in Mountain View, California. One of its cofounders is a Microsoft alum and was also a cofounder of Zynga, the company that produced Farmville and Words with Friends. The other Zume cofounder has a background in the restaurant industry.

Questions

How would the each of the following be depreciated?

Vehicles?

Ovens?

Robots?

Software?

Would Zume capitalize or expense the cost of the 56 pizza ovens inside the truck?

If a Zume Pizza truck needs replacement tires after it has been driven 75,000 miles, is the cost of those tires capitalized or expensed by Zume?

What is the impact of capitalizing an item on the balance sheet? On the income statement?

What is the impact of expensing an item on the balance sheet? On the income statement?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A Textbook Of Cost And Management Accounting

Authors: M N Arora

11th Edition

9390470501, 978-9390470501

More Books

Students also viewed these Accounting questions

Question

=+ How can they be incorporated into social media content?

Answered: 1 week ago