Question
Speedy Logistics offers delivery services. Each delivery is estimated to take 2 hours. The company anticipates 8,000 deliveries annually. They have invested $1,500,000 in their
Speedy Logistics offers delivery services. Each delivery is estimated to take 2 hours. The company anticipates 8,000 deliveries annually. They have invested $1,500,000 in their facilities and aim for an ROI of 18%. The budgeted costs for the coming year are shown below:
| Cost Item | Per Delivery ($) | Total ($) |
|---|---|---|
| Direct Materials (Fuel, etc.) | 10 | 80,000 |
| Direct Labor (Drivers) | 30 | 240,000 |
| Variable Overhead | 5 | 40,000 |
| Fixed Overhead | - | 270,000 |
| Variable Selling & Admin Expenses | 3 | 24,000 |
| Fixed Selling & Admin Expenses | - | 120,000 |
Required:
- Determine the total cost per delivery.
- Calculate the desired ROI per delivery.
- Compute the target price per delivery.
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Financial Accounting
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
2nd Edition
0078110823, 9780078110825
