Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hart Company sells and delivers office furniture across Western Canada. The costs associated with the acquisition and annual operation of a delivery truck are

image text in transcribed

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: Insurance Licences Taxes (vehicle) Garage rent for parking (per truck) Depreciation ($23,500 5 years) Gasoline, oil, tires, and repairs $ 3,941 $ 185 $ 114 $ 1,140 $ 4,700 $ 0.16/km Required: 1. Assume that Hart Company owns one truck that has been driven 42,000 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. This part of the question is not part of your Connect assignment. 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 kilometres 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 kilometres 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

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

Step: 3

blur-text-image

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

Financial Accounting and Reporting

Authors: Barry Elliott, Jamie Elliott

14th Edition

978-0273744535, 273744445, 273744534, 978-0273744443

More Books

Students also viewed these Accounting questions