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The Rapid Delivery Service is considering the expansion of its business into afternoon retail delivery service. This would require an additional $29,000 in labor costs
The Rapid Delivery Service is considering the expansion of its business into afternoon retail delivery service. This would require an additional $29,000 in labor costs per month. Company-owned vehicles now used to make morning deliveries to local manufacturers could be used in the afternoons to make retail deliveries. However, it is estimated that an additional $10,400 would be required per month for gas, oil, and maintenance. It is further estimated that the retail delivery use of the trucks would be allocated 45% of the existing $13,400 fixed vehicle costs. What is the differential delivery cost per month for expanding into the retail delivery market?
Multiple Choice
$29,000.
$44,080.
$45,430.
$39,400.
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