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How much will New Madrid gain if they approach Venus and Venus agrees to implement this "activity-reducing" plan? How much will Venus benefit financially by implementing this plan?

How much will New Madrid gain if they approach Venus and Venus agrees to implement this "activity-reducing" plan? How much will Venus benefit financially by implementing this plan?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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9. New Madrid Chocolate Corporation manufactures bulk chocolate that it sells to Venus Candy Company. Currently, New Madrid packages and ships their bulk chocolate in 50-pound bars that are then shipped by truck to Venus. Venus then unpacks the bars, disposes of the packaging, melts the bars, and works the chocolate into smaller retail products. An astute and environmental conscientious employee observes that New Madrid could make the chocolate keep it hot or warm and ship it in heated tankers to Venus. This would save cooling and reheating energy cost, packaging cost and time associated with these activities. Assume the following cost: • Cooling cost and time for New Madrid $10,000 • Packaging cost for New Madrid $20,000 Annual transportation cost by truck $50,000 paid by New Madrid Annual transportation cost by train $40,000 paid by New Madrid Unpackaging and disposal cost of packaging for Venus $10,000 • Reheating cost and time for Venus $30,000 How much will New Madrid gain if they approach Venus and Venus agrees to implement this "activity-reducing" plan? How much will Venus benefit financially by implementing this plan? 10. Keeping the prior example in mind - please discuss the costs that Uber and Lyft currently save by having independent contractors drive their personal automobiles today. Additionally, please discuss the cost that will revert (or are created and shift) to Uber and Lyft if they are successful in shifting to self-driving cars in the future.
Transcribed Image Text:9. New Madrid Chocolate Corporation manufactures bulk chocolate that it sells to Venus Candy Company. Currently, New Madrid packages and ships their bulk chocolate in 50-pound bars that are then shipped by truck to Venus. Venus then unpacks the bars, disposes of the packaging, melts the bars, and works the chocolate into smaller retail products. An astute and environmental conscientious employee observes that New Madrid could make the chocolate keep it hot or warm and ship it in heated tankers to Venus. This would save cooling and reheating energy cost, packaging cost and time associated with these activities. Assume the following cost: • Cooling cost and time for New Madrid $10,000 • Packaging cost for New Madrid $20,000 Annual transportation cost by truck $50,000 paid by New Madrid Annual transportation cost by train $40,000 paid by New Madrid Unpackaging and disposal cost of packaging for Venus $10,000 • Reheating cost and time for Venus $30,000 How much will New Madrid gain if they approach Venus and Venus agrees to implement this "activity-reducing" plan? How much will Venus benefit financially by implementing this plan? 10. Keeping the prior example in mind - please discuss the costs that Uber and Lyft currently save by having independent contractors drive their personal automobiles today. Additionally, please discuss the cost that will revert (or are created and shift) to Uber and Lyft if they are successful in shifting to self-driving cars in the future.
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