Your small remodeling business has two work vehicles. One is a small passenger car used for job-site visits and for other general business purposes. The other is a heavy truck used to haul equipment. The car gets 25 miles per gallon (mpg). The truck gets 10 mpg. You want to improve gas mileage to save money, and you have enough money to upgrade one vehicle. The upgrade cost will be the same for both vehicles. An upgraded car will get 40 mpg; an upgraded truck will get 12.5 mpg. The cost of gasoline is $4.10 per gallon Calculate the annual fuel savings in gallons for the truck and car assuming both vehicles are driven 16,000 miles per year. (Round your answer to 2 decimal places. (e.g., 32.16)) Fuel savings 157.5 gallons per year Truck 210 gallons per year Car Assuming an upgrade is a good idea in the first place, which one should you upgrade? Both vehicles are driven 16,000 miles per year. Car Truck

Your small remodeling business has two work vehicles. One is a small passenger car used for job-site visits and for other general business purposes. The other is a heavy truck used to haul equipment. The car gets 25 miles per gallon (mpg). The truck gets 10 mpg. You want to improve gas mileage to save money, and you have enough money to upgrade one vehicle. The upgrade cost will be the same for both vehicles. An upgraded car will get 40 mpg; an upgraded truck will get 12.5 mpg. The cost of gasoline is $4.10 per gallon Calculate the annual fuel savings in gallons for the truck and car assuming both vehicles are driven 16,000 miles per year. (Round your answer to 2 decimal places. (e.g., 32.16)) Fuel savings 157.5 gallons per year Truck 210 gallons per year Car Assuming an upgrade is a good idea in the first place, which one should you upgrade? Both vehicles are driven 16,000 miles per year. Car Truck

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 15PB: Dr. Detail is a mobile car wash. The price for a standard wash is $35 and takes half an hour. Each...

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Dr. Detail is a mobile car wash. The price for a standard wash is $35 and takes half an hour. Each worker is paid $20/hr, uses $5 of materials and $0.50 per mile to use their own vehicle to travel from job to job. The average job is 5 miles. Ernest Kuhns son got sick in the car, and Ernest Kuhn has asked Dr. Detail to detail his car instead of doing a simple wash and vacuum. A. Determine the differential income if $100 was charged to detail the car. Each car detail will take 2 hours. The materials used by the worker is three times that of a standard car wash. B. If the price is raised to $150, what is the differential income change? C. Keeping the price at $150, if the worker rate per hour would increase to $20/hr how would the differential income change? Prepare an Excel spreadsheet. D. What other issues would you need to consider?
You are thinking of buying a van that will be used only for business. The cost of the van is estimated at $39,145. You would spend an additional $2,725 to have the van painted. In addition, you want the back seat of the van removed so that she will have lots of room to transport your mixer inventory as well as your catering supplies. The cost of taking out the back seat and installing shelving units is estimated at $1,330. You expect the van to last about 5 years, and you expect to drive it for 200,000 miles. The annual cost of vehicle insurance will be $2,500. You estimate that at the end of the 5-year useful life the van will sell for $7,200. Assume that you will buy the van on August 15, 2021, and it will be ready for use on September 1, 2021. You are concerned about the impact of the van’s cost on your income statement and balance sheet. You will need to calculate the van’s depreciation. Required part C Determine the cost of the van. Prepare three depreciation tables for 2021,…
You are thinking of buying a van that will be used only for business. The cost of the van is estimated at $39,145. You would spend an additional $2,725 to have the van painted. In addition, you want the back seat of the van removed so that she will have lots of room to transport your mixer inventory as well as your catering supplies. The cost of taking out the back seat and installing shelving units is estimated at $1,330. You expect the van to last about 5 years, and you expect to drive it for 200,000 miles. The annual cost of vehicle insurance will be $2,500. You estimate that at the end of the 5-year useful life the van will sell for $7,200. Assume that you will buy the van on August 15, 2021, and it will be ready for use on September 1, 2021. You are concerned about the impact of the van’s cost on your income statement and balance sheet. You will need to calculate the van’s depreciation. The cost of the van total is: $43,200(van amount+paint+modifications) Required part C Prepare…
Big Trucks INC. is a company that provides car rental services. The company's fleet is mostly made up of big trucks for people in the construction business. The company has to replace one of his cars because it is too old and clients don't want to lease it anymore. The truck was initially bought at P2,000,000 and can be sold at P50,000 but the current market price of a similar truck is P2,300,000. How much is the replacement cost?
Natalie is thinking of buying a van that will be used only for business. The cost of the van is estimated at $36,500. Natalie would spend an additional $2,500 to have the van painted. In addition, she wants the back seat of the van removed so that she will have lots of room to transport her mixer inventory as well as her baking supplies. The cost of taking out the back seat and installing shelving units is estimated at $1,500. She expects the van to last about 5 years, and she expects to drive it for 200,000 miles. The annual cost of vehicle insurance will be $2,400. Natalie estimates that at the end of the 5-year useful life the van will sell for $7,500. Assume that she will buy the van on August 15, 2023, and it will be ready for use on September 1, 2023. Natalie is concerned about the impact of the van’s cost on her income statement and balance sheet. She has come to you for advice on calculating the van’s depreciation. Instructions (a) Determine the cost of the van. (b) Prepare…
Natalie is thinking of buying a van that will be used only for business. The cost of the van is estimated at $36,500. Natalie would spend an additional $2,500 to have the van painted. In addition, she wants the back seat of the van removed so that she will have lots of room to transport her mixer inventory as well as her baking supplies. The cost of taking out the back seat and installing shelving units is estimated at $1,500. She expects the van to last about 5 years, and she expects to drive it for 200,000 miles. The annual cost of vehicle insurance will be $2,400. Natalie estimates that at the end of the 5-year useful life the van will sell for $7,500. Assume that she will buy the van on August 15, 2023, and it will be ready for use on September 1, 2023. Natalie is concerned about the impact of the van’s cost on her income statement and balance sheet. She has come to you for advice on calculating the van’s depreciation. Instructions (a) Determine the cost of the van. (b) Prepare…
(a) An enterprising college student has decided to purchase a local car wash business. The purchase cost is $250,000. Car washes will be priced at $8.50 and variable cost per car (soap, water, labor etc.) is expected to equal $3.50. How many cars must be washed in order to recover the $250,000 purchase price?
Natalie is also thinking of buying a van that will be used only for business. The cost of the van is estimated at $36,500. Natalie would spend an additional $2,500 to have the van painted. In addition, she wants the back seat of the van removed so that she will have lots of room to transport her mixer inventory as well as her baking supplies. The cost of taking out the back seat and installing shelving units is estimated at $1,500. She expects the van to last about 5 years, and she expects to drive it for 200,000 miles. The annual cost of vehicle insurance will be $2,400. Natalie estimates that at the end of the 5-year useful life the van will sell for $7,500. Assume that she will buy the van on August 15, 2022, and it will be ready for use on September 1, 2022. Natalie is concerned about the impact of the van’s cost on her income statement and balance sheet. She has come to you for advice on calculating the van’s depreciation. Instructions (c) What impact will the three methods of…
A cake shop wants to replace their aging bakery. For this, he wants to decide on one of the three situations with different furnaces and alternatives to buy and rent these furnaces. For the first alternative, he wants to buy a large furnace with a purchase cost of $ 48000 and a small furnace with a purchase cost of $ 13000. The annual usage cost of the big furnace, which has an economic life of 8 years, is $ 3000 and its scrap value is $ 12000. The small furnace has an annual usage cost of $ 550 and a scrap value of $ 3600 during its economic life of 4 years. For the second alternative, it is planned to buy a medium sized furnace with an annual purchase cost of $ 26000 and lease 2 of the small furnace with a rental cost of $ 6600. The annual usage cost of the medium size furnace with an economic life of 6 years is $ 1050 and its scrap value is $ 7500. In the third alternative, large and medium sized furnaces with rental costs of $ 25000 and $ 14000, respectively, are required to be…
A mechanical engineer who designs and sells equipment that automates manual labor processes is offering a machine/robot combination that will significantly reduce labor costs associated with manufacturing garage-door opener transmitters. The equipment has a first cost of $170,000, an estimated annual operating cost of $54,000, a maximum useful life of 5 years, and a $20,000 salvage value anytime it is replaced. The existing equipment was purchased 12 years ago for $65,000 and has an annual operating cost of $78,000. At most, the currently owned equipment can be used 2 more years, at which time it will be auctioned off for an expected amount of $6000, less 33% paid to the company handling the auction. The same scenario will occur if the currently owned equipment is replaced now. Determine the defender and challenger estimates of P, n, S, and AOC in conducting a replacement analysis today at an interest rate of 20% per year.
A company pays a sales representative 0.50 $ per kilometer in return for using its own car for company works. However, the company is considering another solution for this situation. So much so that the company will buy a car and make the car available to its representative. The data for this solution are as follows: The cost of buying such a car is 24,000 $ and it has a service life of 5 years. The market value at the end of this life is 7,000 $. The cost of keeping the car in a garage when it is not running is 2,500 $ per year, and the total fuel-tyre-maintenance costs are 0.30 $ per kilometer. If the interest rate is 15%, how many kilometers must the sales representative travel so that the costs of both methods are equal (break-even)? (please explain) a) 42.356 b) 43.107 c) 44.226 d) 45.340
Brown's local bakery is worried about increased costs- particularly energy. Last year's records can provide a fairly good estimate of the parameters for this year. Wende Brown the owner does not believe things have changed much, but she did invest in additional $3000 for modifications to bakery's oven to make them more energy efficient. The modifications were supposed to make the oven's atleast 15% more efficient. Brown has asked you to check the energy savings of the new ovens and also look over other measures of bakery's productivity to see if the modifications were beneficial. You have the following data to work with: (See the attached image.)