The Speedy Delivery Service Is Considering the Expansion of Its

question 16

Multiple Choice

The Speedy Delivery Service is considering the expansion of its business into afternoon retail delivery service.This would require an additional $25,000 in labor costs per month.Company-owned vehicles now used to make morning deliveries to local manufacturers could be used in the afternoons to make retail deliveries.However,it is estimated that an additional $10,000 would be required per month for gas,oil,and maintenance.It is further estimated that the retail delivery use of the trucks would be allocated 45% of the existing $13,000 fixed vehicle costs.What is the differential delivery cost per month for expanding into the retail delivery market?

• A)$25,000.
• B)$35,000.
• C)$39,500.
• D)$40,850.

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Definitions:

Competitive World

An environment where individuals or organizations compete for resources, recognition, or achievement in a context of scarcity and rivalry.

Operations

The day-to-day activities necessary for an organization to function efficiently and to produce goods or services for customers.

Mental Models

Internal representations of the external world that individuals use to understand and interact with it.

Unexpected Information

Information that comes as a surprise or is not anticipated based on current knowledge or predictions.