In connection with surfacing a new highway, a contractor has a choice of two sites on which to set up the asphalt- mixing plant equipment. The contractor estimates that it will cost $1.25 per cubic yard mile (yd³ -mile) to haul the asphalt-paving material from the mixing plant to the job location. Factors relating to the two mixing sites are as follows: Cost Factor Average hauling distance Monthly rental of site Cost to set to and equipment Hauling expense Flagperson remove Site A 6 miles $1,200 $17,000 $1.25 / yd³ -mile Not required Site B 4.3 miles $5,500 $25,000 $1.25 / yd³ -mile $96 / day The job requires 50,000 cubic yards of mixed-asphalt-paving material. It is estimated that four months (17 weeks of five working days per week) will be required for the job. Compare the two sites in terms of their total costs. Assume that the cost of the return trip is negligible. A) Which is the better site? B) For the selected site, how many cubic yards of paving material does the contractor have to deliver before staring to make a profit if paid $8.35 per cubic yard delivered to the job location?
In connection with surfacing a new highway, a contractor has a choice of two sites on which to set up the asphalt- mixing plant equipment. The contractor estimates that it will cost $1.25 per cubic yard mile (yd³ -mile) to haul the asphalt-paving material from the mixing plant to the job location. Factors relating to the two mixing sites are as follows: Cost Factor Average hauling distance Monthly rental of site Cost to set to and equipment Hauling expense Flagperson remove Site A 6 miles $1,200 $17,000 $1.25 / yd³ -mile Not required Site B 4.3 miles $5,500 $25,000 $1.25 / yd³ -mile $96 / day The job requires 50,000 cubic yards of mixed-asphalt-paving material. It is estimated that four months (17 weeks of five working days per week) will be required for the job. Compare the two sites in terms of their total costs. Assume that the cost of the return trip is negligible. A) Which is the better site? B) For the selected site, how many cubic yards of paving material does the contractor have to deliver before staring to make a profit if paid $8.35 per cubic yard delivered to the job location?
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 4EA: Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on...
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![In connection with surfacing a new highway, a contractor has a choice of two sites on which to set up the asphalt-
mixing plant equipment. The contractor estimates that it will cost $1.25 per cubic yard mile (yd³ -mile) to haul the
asphalt-paving material from the mixing plant to the job location. Factors relating to the two mixing sites are as
follows:
Cost Factor
Average hauling distance
Monthly rental of site
Cost to set to and remove
equipment
Hauling expense
Flagperson
Site A
6 miles
$1,200
$17,000
$1.25 / yd³ -mile
Not required
Site B
4.3 miles
$5,500
$25,000
$1.25 / yd³ -mile
$96 / day
The job requires 50,000 cubic yards of mixed-asphalt-paving material. It is estimated that four months (17 weeks of
five working days per week) will be required for the job. Compare the two sites in terms of their total costs. Assume
that the cost of the return trip is negligible. A) Which is the better site? B) For the selected site, how many cubic
yards of paving material does the contractor have to deliver before staring to make a profit if paid $8.35 per cubic
yard delivered to the job location?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5ed63272-aed6-484f-acc3-1c85634e54fa%2F2714b2d2-0991-4743-9b6a-611728c69a61%2Fva9x4v_processed.jpeg&w=3840&q=75)
Transcribed Image Text:In connection with surfacing a new highway, a contractor has a choice of two sites on which to set up the asphalt-
mixing plant equipment. The contractor estimates that it will cost $1.25 per cubic yard mile (yd³ -mile) to haul the
asphalt-paving material from the mixing plant to the job location. Factors relating to the two mixing sites are as
follows:
Cost Factor
Average hauling distance
Monthly rental of site
Cost to set to and remove
equipment
Hauling expense
Flagperson
Site A
6 miles
$1,200
$17,000
$1.25 / yd³ -mile
Not required
Site B
4.3 miles
$5,500
$25,000
$1.25 / yd³ -mile
$96 / day
The job requires 50,000 cubic yards of mixed-asphalt-paving material. It is estimated that four months (17 weeks of
five working days per week) will be required for the job. Compare the two sites in terms of their total costs. Assume
that the cost of the return trip is negligible. A) Which is the better site? B) For the selected site, how many cubic
yards of paving material does the contractor have to deliver before staring to make a profit if paid $8.35 per cubic
yard delivered to the job location?
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