Question: I need help with these problems please! eBook Calculator Bridget Youhzi works for a large firm. Her alma mater has asked her to make a

I need help with these problems please!


eBook Calculator Bridget Youhzi works for a large firm. Her alma mater has asked her to make a presentation to the upcoming accounting honor society's annual scholarship dinner. Her firm supports the presentation because it hopes to recruit more excellent employees like Bridget. The university is 200 miles from her office. In order to get to the dinner by 5:00 p.m., she will need to leave work at 1:00 p.m. She can drive her personal car and be reimbursed $0.50 per mile. The dinner ends at 9:00 p.m. Company policy allows her to spend the night if the return trip is four hours or more. There is a student-run inn and conference center across the street from campus that charges $100 per night. Instead of driving, she could catch a 3:00 p.m. flight that has a round-trip fare of $300. Flying would require her to rent a car for $38 per day and pay an airport parking fee of $24 for the day. The company pays a per diem of $34 for incidentals if the employee spends at least six hours out of town. (The per diem would be for one 24-hour period for either flying or driving.) As a manager, Bridget is responsible for recruiting within a budget and wants to determine which is more economical. Use the information provided to answer these questions. A. What is the total amount of expenses Bridget would include on her expense report if she drives? $ 334 B. What is the total amount of expenses she would include on her expense report if she flies? 462 X C. What is the relevant cost of driving? 234 X D. What is the relevant cost of flying? E. What is the differential cost of flying over driving? F. What other factors should Bridget consider in her decision between driving and flying? a. Driving allows her more flexibility to change the schedule at the last minute. b. Eight hours of driving time might be put toward another work-related project. c. Flying would still require getting to the airport about 1:30 or 2:00 p.m. to park and check in. d. All of the above answers are correct. Feedback Check My Work What costs apply to the choice of driving? What costs apply to flying? What costs apply to both choices? Check My Work NextProblem 3 - Discontinuing a Segment or Product: La George's Donuts Store Co., operates two stores. One on Haggerty Rd. in Livonia, and the other on Ford Rd. in Canton. Results for the month of May, which is representative of all months, are as follows: Livonia Canton store Total store Sales revenue 80,000 $ 120,000 $ 200,000 Variable expenses 32,000 84,000 116,000 Contribution margin 48,000 36,000 84,000 Direct fixed expenses 20,000 40,000 60,000 Common fixed expenses 4,000 6,000 10,000 Total fixed expenses 24,000 46,000 70,000 Operating income $ 24,000 $ (10,000) $ 14,000 The following information pertains to La George's Donuts Store Co.: . One-fourth of each store's direct fixed expense would continue if either store was closed. La George's Donuts Store Co. allocates common fixed expenses to each location on the basis of sales dollars. . Management estimates that closing the store in Canton would result in a 10% decrease in the Livonia store's sales, while closing the Livonia store would have no effect on the Canton store's sales. Required: a. Management believes that the Canton store should be closed since it is operating at a loss. Do you support management's belief? Why or why not? b. Should management consider closing the Livonia store rather than the Canton store? Why or why not? c. La George's Donuts Store Co. is considering a special promotional campaign at the Canton store. They expect a $6,000 monthly increase in advertising expenses to generate a 10% increase in the store's sales volume. The campaign would not affect the Livonia store in any way. What effect would the promotion have on La George's Donuts Store Co.'s monthly income? Should the campaign be implemented? Why or why not? Ignore the answers from (a) and (b) when answering this question. d. Half of the Canton store's dollar sales come from items that are sold at variable cost to attract customers to the store. Managers are considering deleting those items from the product mix. Doing so would reduce the Canton store's direct fixed expense by 15% but would also reduce the remaining sales volume result by an additional 20%. There would be no effect on the Livonia store. Should management implement this change in the product mix? Why or why not
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