Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What costs are relevant when determining how many pizzas a month Zume Pizza must sell to break even? Zume Pizza uses a combination of robots,

image text in transcribed
What costs are relevant when determining how many pizzas a month Zume Pizza must sell to break even? Zume Pizza uses a combination of robots, artificial intelligence (Al), and GPS in its food trucks to deliver pizzas to customers' houses just as the pizza is finished baking. Pizzas are actually prepared and baked in the Zume pizza truck by an employee assisted by robots. Zume Pizza started operations in April 2o16 and is currently selling about 250 pizzas per day. The pizza delivery process starts with a customer using Zume Pizza's app to order pizza. The pizza combinations offered by Zume have been derived by analyzing customer data to offer several popular options. THEE preset combination recipes are programmed into Zume's computers, so that in robots can build and bake the pizzas e'fficierrtly. 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 truck's GPS. A robot will put the pizza into the designated oven exactly four minutes before the truck reaches the customer's house. A worker will pull out the pizza when it is nished and place it into the cutter, where a robot will cut the pizza. The pizza is boxed and the pizza is delivered to the customer's door, all within a few minutes of finishing baking. Eventually, Zume's owners hope to use a robot to remove pizzas from the oven as well. Assume that average selling price per pizza is about $18. To follow are Etimates of costs that might be incurred by Zume Pizza in its pizza business. Description of cost Cost utirnate Ingredient cost per pizza 5 6.00 Truck fuel cost per delivery 5 3.00 Cost of pizza delivery truck {estimated useful life 5 years, no salvage value] 5 80,000 Cost of initial software development {estimated useful life 3 years] 5 30,000 Annual maintenanoefupdate costs of software 5 25,000 Supplies cost per pizza {bore napkins, etc.} 5 1.00 Cost to park pizza delivery truck per year {garage facility] 5 24,000 Insurance and other regulatory costs per year 5 36,000 Cost of cofounders' salaries per year 5 150,000 Cost to rent restaurant kitchen facility for testing and food prep {per year} 5 45,000 Direct labor cost per pizza {driving truck and preparing pizza in truck} 5 5.00

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

Textbook Of Financial Accounting And Analysis

Authors: Gaurav Agrawal

1st Edition

9350840901, 9789350840900

More Books

Students also viewed these Accounting questions

Question

List three benefits of using a to-do list.

Answered: 1 week ago

Question

What can Chandra do to correct her mistake?

Answered: 1 week ago