Assignment 6 ignment6.pdf Question 1 (9 marks) Roster Roofing Ltd. is planning o
ID: 2426622 • Letter: A
Question
Assignment 6 ignment6.pdf Question 1 (9 marks) Roster Roofing Ltd. is planning on purchasing two new trucks for its operation. The operating cost of these trucks is expected to be lower per mile than the trucks it is trading in. The owner is trying to determine if the company would be better off keeping the older vehicles or purchasing the new trucks. He has identified the following decision factors to consider a. Original cost and book value of the old trucks b. Roofing revenues, which are not expected to change with the purchase of the new vehicles 4 Operating costs of the new and the old vehicles c. d. e. f. Cost of the new trucks and the related depreciation costs Proceeds from the sale of the old vehicles The 10% return on alternative investments that Roster will forego by tying up the company's cash in new vehicles g. Drivers' wages and fringe benefits Required: Classify the seven decision factors into the following categories (factors may be used more than once): a. Relevant costs b. Opportunity costs c. Sunk costs d. Factors to be considered in the decision 1. TRU Open LeaningExplanation / Answer
Q3. Solution.
Hospital has 250 bade 75% occupied.
250 x 75% = 187.50.
Food cost = 187.50 x 365 x $15 = $1,026,562.50
% change in Cost = $1120000 - 1088562.50 = 31437.5
= $31,437.5 / $1,120,000 = 2.80%
Sales revenue Incvresed by 10%.
Food service should be outsourced.
Cost Amount Last year Amount Supplier Food cost 950,000.00 1,026,562.50 labor 80,000.00 8,000.00 Variable overhead 40,000.00 4,000.00 Fixed overhead 50,000.00 50,000.00 Total cost 1,120,000.00 1,088,562.50 Sales revenue 75,000.00 82,500.00