You are the Logistic Manager of ABC Beverage Company which uses its own private transportation. The...

 

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You are the Logistic Manager of ABC Beverage Company which uses its own private transportation. The following summarize the fixed and marginal (variable) costs of one truck in your fleet which travels 140,000 miles per year. You have estimated that if a truck travels 70,000 miles more its fixed cost increases by 20%. Would assigning your trucks to additional travel be cost effective? (show all your calculations for fixed and variable cost savings) (20 marks) Fixed Costs /mile /mile Depreciation (Lease) truck, trailer, garage, office Interest and Depreciaition 8.7 4.8 interst and depreciation on vehicles, 3.2 Depreciation and interest on garage, office, equip't 1.6 Management and Overhead salaries, benefits, workers comp, travel, etc. 13.6 TOTAL 27.1 Marginal (variable) Costs Veicle-based S/mile $/HOUR fuel-oil costs 50.63 $33.00 lease/purchase payments 0.206 $10.72 Repair/ manitenance $4.79 $3.23 $3.12 0.092 Fuel Taxes 0.062 Truck insurance premium 0.6 Tires $1.56 $1.25 0.3 Licenses &oversize permits 0.024 Tolls 0.019 $0.99 Driver-based Driver pay 0.441 $16.59 $6.56 Driver benefit 0.126 Driver bonus payments $1.87 27.1 0.036 TOTAL $1.73 You are the Logistic Manager of ABC Beverage Company which uses its own private transportation. The following summarize the fixed and marginal (variable) costs of one truck in your fleet which travels 140,000 miles per year. You have estimated that if a truck travels 70,000 miles more its fixed cost increases by 20%. Would assigning your trucks to additional travel be cost effective? (show all your calculations for fixed and variable cost savings) (20 marks) Fixed Costs /mile /mile Depreciation (Lease) truck, trailer, garage, office Interest and Depreciaition 8.7 4.8 interst and depreciation on vehicles, 3.2 Depreciation and interest on garage, office, equip't 1.6 Management and Overhead salaries, benefits, workers comp, travel, etc. 13.6 TOTAL 27.1 Marginal (variable) Costs Veicle-based S/mile $/HOUR fuel-oil costs 50.63 $33.00 lease/purchase payments 0.206 $10.72 Repair/ manitenance $4.79 $3.23 $3.12 0.092 Fuel Taxes 0.062 Truck insurance premium 0.6 Tires $1.56 $1.25 0.3 Licenses &oversize permits 0.024 Tolls 0.019 $0.99 Driver-based Driver pay 0.441 $16.59 $6.56 Driver benefit 0.126 Driver bonus payments $1.87 27.1 0.036 TOTAL $1.73

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Given tht Yu re the Lgisti Mnger f beverge mny whih uses its wn rivte trnsrttin The fllwing s... View the full answer