Homework Help is Here – Start Your Trial Now!
Business
Accounting
Administrative cost Operating costs-trucks Other collection cuals $ 411,000 1,369.000 380.000 nata on customers for the most recent year are Households 13.300 5,100 Number of customers Waste collected (tons) Businesses 4,500 14,000 The City Council of Imperial Falls is considering allowing other private waste haulers to collect waste from busines Information from neighboring cities, the price that other private waste collection firms will charge is estimated to be

Administrative cost Operating costs-trucks Other collection cuals $ 411,000 1,369.000 380.000 nata on customers for the most recent year are Households 13.300 5,100 Number of customers Waste collected (tons) Businesses 4,500 14,000 The City Council of Imperial Falls is considering allowing other private waste haulers to collect waste from busines Information from neighboring cities, the price that other private waste collection firms will charge is estimated to be

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

D1.

Account 

The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to households and businesses. Until recently, Evergreen had an exclusive franchise to provide this service in Imperial Falls, which meant that other waste collection firms could not operate legally in the city. The price per pound of waste collected was regulated at 25 percent above the average total cost of collection Cost data for the most recent year of operations for Evergreen are as follows: Administrative cost Operating costs-trucks Other collection costs Data on customers for the most recent year are Households 13,300 5,100 Number of customers Waste collected (tons) $ 411,000 1,369 000 380,000 The City Council of Imperial Falls is considering allowing other private waste haulers to collect waste from businesses, but not from households. Service to businesses from other waste collection firms would not be subject to price regulation. Based on Information from neighboring cities, the price that other private waste collection firms will charge is estimated to be $0.05 per pound (= $90 per ton). Evergreen's CEO has approached the city council with a proposal to change the way costs are allocated to households and businesses, which will result in different rates for households and businesses. She proposes that administrative costs and truck operating costs be allocated based on the number of customers and the other collection costs be allocated based on pounds collected. The total costs allocated to nouseholds would then be divided by the estimated number of pounds collected from households to determine the cost of collection. The rate would then be 25 percent above the cost. The rate for businesses would be determined using the same calculation. Price per pound Businesses 4,500 14,000 Required: a. Based on cost data from the most recent year, what is the price per pound charged by Evergreen for waste collection under the current system (the same rate for both types of customers)? (Do not round intermediate calculations. Round your answer to 3 decimal places.) Allocated coet per customer Total allocated cost Average allocated cost per pound Price b. Based on cost and waste data from the most recent year, complete the following table to determine the price per pound charged to households and to businesses by Evergreen for waste collection if the CEO's proposal were accepted? (Do not round Intermediate calculations. Round your "Average allocated cost per pound" and "Price" answers to 4 decimal places.) Households Businesses
Transcribed Image Text:The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to households and businesses. Until recently, Evergreen had an exclusive franchise to provide this service in Imperial Falls, which meant that other waste collection firms could not operate legally in the city. The price per pound of waste collected was regulated at 25 percent above the average total cost of collection Cost data for the most recent year of operations for Evergreen are as follows: Administrative cost Operating costs-trucks Other collection costs Data on customers for the most recent year are Households 13,300 5,100 Number of customers Waste collected (tons) $ 411,000 1,369 000 380,000 The City Council of Imperial Falls is considering allowing other private waste haulers to collect waste from businesses, but not from households. Service to businesses from other waste collection firms would not be subject to price regulation. Based on Information from neighboring cities, the price that other private waste collection firms will charge is estimated to be $0.05 per pound (= $90 per ton). Evergreen's CEO has approached the city council with a proposal to change the way costs are allocated to households and businesses, which will result in different rates for households and businesses. She proposes that administrative costs and truck operating costs be allocated based on the number of customers and the other collection costs be allocated based on pounds collected. The total costs allocated to nouseholds would then be divided by the estimated number of pounds collected from households to determine the cost of collection. The rate would then be 25 percent above the cost. The rate for businesses would be determined using the same calculation. Price per pound Businesses 4,500 14,000 Required: a. Based on cost data from the most recent year, what is the price per pound charged by Evergreen for waste collection under the current system (the same rate for both types of customers)? (Do not round intermediate calculations. Round your answer to 3 decimal places.) Allocated coet per customer Total allocated cost Average allocated cost per pound Price b. Based on cost and waste data from the most recent year, complete the following table to determine the price per pound charged to households and to businesses by Evergreen for waste collection if the CEO's proposal were accepted? (Do not round Intermediate calculations. Round your "Average allocated cost per pound" and "Price" answers to 4 decimal places.) Households Businesses
Expert Solution
steps

Step by step

Solved in 3 steps with 3 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Relevant cost analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS