Homework Help is Here – Start Your Trial Now!
Business
Accounting
Alpine Township contracts with Dragoon Environmental Services (DES) to provide solid waste collection to households and businesses. Until recently, DES had an exclusive franchise to provide this service in Alpine, which meant that other waste collection firms could not operate legally in the township. The price per pound of waste collected was regulated at 24 percent above the average total cost of collection.

Alpine Township contracts with Dragoon Environmental Services (DES) to provide solid waste collection to households and businesses. Until recently, DES had an exclusive franchise to provide this service in Alpine, which meant that other waste collection firms could not operate legally in the township. The price per pound of waste collected was regulated at 24 percent above the average total cost of collection.

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
100%
Alpine Township contracts with Dragoon Environmental Services (DES) to provide solid waste collection to households and businesses. Until recently, DES had an exclusive franchise to provide this service in Alpine, which meant that other waste collection firms could not operate legally in the township. The price per pound of waste collected was regulated at 24 percent above the average total cost of collection.. Cost data for the most recent year of operations for DES are as follows: Administrative cost Operating costs-trucks Other collection costs $ 480,000 1,536,000 384,000 Data on customers for the most recent year are as follows: Households Businesses 11,520 2,880 4,000 12,000 Number of customers Waste collected (tons) The Township Board of Alpine 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 (= $100 per ton). DES'S CEO has approached the board with a proposal to change the way costs are allocated to households and businesses, which will result in different rates for households and businesses. The CEO 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 households would then be divided by the estimated number of pounds collected from households to determine the cost. of collection. The rate would then be 24 percent above the cost. The rate for businesses would be determined using the same calculation. Required: a. Based on cost data from the most recent year, what is the price per pound charged by DES for waste collection under the current system (the same rate for both types of customers)? b. Based on cost and waste data from the most recent year, what would be the price per pound charged to households and to businesses by DES for waste collection if the CEO's proposal were accepted? Complete this question by entering your answers in the tabs below. Required A Required B Based on cost data from the most recent year, what is the price per pound charged by DES for waste collection under the current system (the same rate for both types of customers)? Note: Do not round intermediate calculations. Round your answer to 3 decimal places. Price per pound Show Transcribed Text Required A Required B Based on cost and waste data from the most recent year, what would be the price per pound charged to households and to businesses by DES for waste collection if the CEO's proposal were accepted? Note: Do not round intermediate calculations. Round your "Average allocated cost per pound" and "Price" answers to 4 decimal places. Round your "Allocated cost per customer" and "Total allocated costs" answers to the nearest whole dollar. Show less A Allocated cost per customer Allocated cost per ton Allocated total customer cost Allocated total other cost Total allocated cost Average allocated cost per pound Price per pound Households $ 0 $ Businesses 0
Transcribed Image Text:Alpine Township contracts with Dragoon Environmental Services (DES) to provide solid waste collection to households and businesses. Until recently, DES had an exclusive franchise to provide this service in Alpine, which meant that other waste collection firms could not operate legally in the township. The price per pound of waste collected was regulated at 24 percent above the average total cost of collection.. Cost data for the most recent year of operations for DES are as follows: Administrative cost Operating costs-trucks Other collection costs $ 480,000 1,536,000 384,000 Data on customers for the most recent year are as follows: Households Businesses 11,520 2,880 4,000 12,000 Number of customers Waste collected (tons) The Township Board of Alpine 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 (= $100 per ton). DES'S CEO has approached the board with a proposal to change the way costs are allocated to households and businesses, which will result in different rates for households and businesses. The CEO 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 households would then be divided by the estimated number of pounds collected from households to determine the cost. of collection. The rate would then be 24 percent above the cost. The rate for businesses would be determined using the same calculation. Required: a. Based on cost data from the most recent year, what is the price per pound charged by DES for waste collection under the current system (the same rate for both types of customers)? b. Based on cost and waste data from the most recent year, what would be the price per pound charged to households and to businesses by DES for waste collection if the CEO's proposal were accepted? Complete this question by entering your answers in the tabs below. Required A Required B Based on cost data from the most recent year, what is the price per pound charged by DES for waste collection under the current system (the same rate for both types of customers)? Note: Do not round intermediate calculations. Round your answer to 3 decimal places. Price per pound Show Transcribed Text Required A Required B Based on cost and waste data from the most recent year, what would be the price per pound charged to households and to businesses by DES for waste collection if the CEO's proposal were accepted? Note: Do not round intermediate calculations. Round your "Average allocated cost per pound" and "Price" answers to 4 decimal places. Round your "Allocated cost per customer" and "Total allocated costs" answers to the nearest whole dollar. Show less A Allocated cost per customer Allocated cost per ton Allocated total customer cost Allocated total other cost Total allocated cost Average allocated cost per pound Price per pound Households $ 0 $ Businesses 0
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 5 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Fair labor standards act (FLSA)
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.
Similar questions
  • SEE MORE QUESTIONS
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