Figure 11-8. Booth Inc.uses Three Delivery Trucks to Transport Finished Parts from Parts

question 4

Essay

Figure 11-8.
Booth Inc.uses three delivery trucks to transport finished parts from its plant to the plants of its customers.The delivery trucks are obtained through a five-year operating lease that costs $12,000 per year per truck.Booth employs 6 drivers who receive an average salary of $36,000 per year,including benefits.Parts are placed in boxes and placed in the trucks.Each truck holds 20 boxes.The average round-trip distance for a delivery is 40 miles.The boxes are retained by the customers.Each box costs $2.00.Fuel for the trucks costs $1.80 per gallon.A gallon of gas is used every 20 miles.A driver can travel 160 miles in an eight-hour shift.Each driver works 40 hours per week and 50 weeks per year.
Refer to Figure 11-8.Prepare an annual budget for the activity,assuming that all of the capacity of the activity is used (use miles as the activity driver).Identify which resources you would treat as fixed costs and which would be viewed as variable costs.

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Definitions:

Price

The amount of money that must be paid to acquire a good or service.

Introductory Offer

A promotional strategy involving a temporary low price or additional benefits to attract new customers or introduce a new product.

Sales Orientation

A business approach that focuses on making sales of existing products the priority, often at the expense of understanding or addressing the underlying needs of the customer.

Yoga Studio

A dedicated space where individuals participate in yoga classes or practices, often led by experienced instructors, focusing on physical postures, breathing techniques, and meditation for health and relaxation.