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Hart Company sells and delivers office furniture across Western Canada.
The costs associated with the acquisition and annual operation of a delivery truck are given below:
Insurance $4,446
Licences $210
Taxes (vehicle) $124
Garage rent for parking (per truck) $1,240
Depreciation ($26,000 ÷ 5 years) $5,200
Gasoline, oil, tires, and repairs $0.21/km
Required:
Question 1: Assume that the company decides to use the truck during the second year. Near year-end, an order is received from a customer over 1,000 kilometres away. What costs from the previous list are relevant in a decision between using the truck to make the delivery and having the delivery done commercially? (Round your answer to 2 decimal places.)
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