User Account

All Pages

What is the annual number of miles required

Assignment Help Managerial Accounting
Reference no: EM133102408

Question - After a closer examination of capacity, management believes an additional rig is required to service the FHP account. Assume Over-land's management chooses to invest in one additional truck and trailer that can serve the needs of FHP (at least initially). Assume the annual incremental fixed costs associated with acquiring the additional equipment is $50,000. Further, FHP would agree to pay $2.20 per mile (total including FSC and miscellaneous) if Over-land would sign a five-year contract. What is the annual number of miles required for Over-land to break even, assuming the company adds one truck and trailer? What is the expected annual increase in profitability from the FHP contract? (Use 52 weeks per year in your calculations.)

Contract Revenue (per mile) 2.20

Variable Expenses (per mile) 1.39

Contribution Margin (per mile) 0.81

Breakeven mileage

Incremental Fixed Costs 50,000

Contribution Margin (per mile) 0.81

Breakeven Mileage (annual) 61,728

Expected Annual Mileage 156,000

Contribution Margin 126,360

Incremental Fixed Costs -50,000

Net Annual Benefit 76,36

Required - What is the expected annual increase in profitability from the FHP contract?

Reference no: EM133102408

Questions Cloud

Health care impacting organizational change : What are some current trends in health care impacting organizational change? Provide specific examples.
Is amazon the best retailer in the world : Is Amazon the "best" retailer in the world?
Explain the team responsibilities and duties : Explain the team responsibilities and duties and their relationship to individual responsibilities and duties in the hospitality sector
How do you build good work relationships : How do you build good work relationships with your workgroup members? Document any six (6) ways.
What is the annual number of miles required : What is the annual number of miles required for Over-land to break even, assuming the company adds one truck and trailer
Benefits of sharing and updating information : What are the benefits of sharing and updating information relevant to work with a workgroup?
Opportunities for individuals and the team to improve : How can you identify opportunities for individuals and the team to improve? Mention any three (3) ways.
Minimizing organizational weaknesses : Assume that you are setting social media marketing goals for Trader Joe's. Pick one social media marketing goal for Trader Joe's and explain what you would do t
What is intermodal transportation : What is intermodal transportation?

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Compute the total direct materials cost variance

Each unit requires 2.5 hours of direct labor. Compute direct materials price variance, direct materials quantity variance, total direct materials cost variance

  What price would sell for now if the investor required

Consider an 8 year, 10% preference stock with a par value of $1 000. The required return is 9%. What is the value of the preference stock?

  Calculate the budgeted total unit cost

Sales for the year are expected to total 1,700,000 units. Quarterly sales are 22%, 25%, 24%, and 29%, Calculate the budgeted total unit cost

  What are the earnings per share amounts

Porter owns none of these bonds. What are the earnings per share amounts that Porter should report in its current year consolidated income statement?

  Calculate the residual income of golden hospital

Calculate the residual income/EVA of Golden Hospital. (Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)

  Calculate queen corporation income tax expense

Calculate Queen Corporation's Income Tax Expense for 2021. Net Operating Loss Carry Forward $1,000,000. §162 Expense (All Deductible) $ 500,000

  Why is sampling still used

One of the benefits of Data Analytics is the ability to see and test the full population. In that case, why is sampling (even monetary sampling) still used

  How much manufacturing overhead was applied for job

Job 105M-T had direct material costs of $4,010 and a total manufacturing cost of $25,650. How much manufacturing overhead was applied?

  Why labor rate variance will not be zero

"Our workers are all under labor contracts; therefore, our labor rate variance is bound to be zero." is not true, and why labor rate variance will not be zero

  How the profitability index equals

How the profitability index equals? A firm is considering a project with an initial investment of $3,000,000. The firm's cost of capital is 12%.

  Which operating losses incurred during the start-up years be

Which Operating losses incurred during the start-up years of a new business should be? capitalized as a deferred charge and amortized over five years.

  How much cost should be allocated

How much cost should be allocated to Type 1 and Type 2, respectively?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd