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Lantz Family Restaurant operates in a suburb of a major city. Recently, the managers at Lantz have noticed an increase in the use of delivery apps such as Grubhub and DoorDash by their customers. The average fee paid by Lantz for this service currently is $6 per delivery. The managers are considering starting their own delivery service that they estimate would attract about 75 percent of the current deliveries. (Not all customers will switch, even though the service would be free, because of the convenience of the app, habit, and other factors.) Estimates by the financial consultant to Lantz are that the cost of the service, if provided by Lantz, would be $2.30 per delivery and an incremental $1,350 per month fixed costs. In an average month, 480 orders Lantz receives are to be delivered. Required: a. Prepare a schedule that shows the differential costs. b. Should Lantz Family Restaurant provide their own delivery service or continue to rely on other firms? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule that shows the differential costs. (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Cost to buy Variable costs Incremental fixed costs Total costs Status Quo (Buy) $ Alternative (Make) 0 $ 0 Difference

Lantz Family Restaurant operates in a suburb of a major city. Recently, the managers at Lantz have noticed an increase in the use of delivery apps such as Grubhub and DoorDash by their customers. The average fee paid by Lantz for this service currently is $6 per delivery. The managers are considering starting their own delivery service that they estimate would attract about 75 percent of the current deliveries. (Not all customers will switch, even though the service would be free, because of the convenience of the app, habit, and other factors.) Estimates by the financial consultant to Lantz are that the cost of the service, if provided by Lantz, would be $2.30 per delivery and an incremental $1,350 per month fixed costs. In an average month, 480 orders Lantz receives are to be delivered. Required: a. Prepare a schedule that shows the differential costs. b. Should Lantz Family Restaurant provide their own delivery service or continue to rely on other firms? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule that shows the differential costs. (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Cost to buy Variable costs Incremental fixed costs Total costs Status Quo (Buy) $ Alternative (Make) 0 $ 0 Difference

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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Lantz Family Restaurant operates in a suburb of a major city. Recently, the managers at Lantz have noticed an increase in the use of delivery apps such as Grubhub and DoorDash by their customers. The average fee paid by Lantz for this service currently is $6 per delivery. The managers are considering starting their own delivery service that they estimate would attract about 75 percent of the current deliveries. (Not all customers will switch, even though the service would be free, because of the convenience of the app, habit, and other factors.) Estimates by the financial consultant to Lantz are that the cost of the service, if provided by Lantz, would be $2.30 per delivery and an incremental $1,350 per month fixed costs. In an average month, 480 orders Lantz receives are to be delivered. Required: a. Prepare a schedule that shows the differential costs. b. Should Lantz Family Restaurant provide their own delivery service or continue to rely on other firms? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule that shows the differential costs. (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Cost to buy Variable costs Incremental fixed costs Total costs Status Quo (Buy) $ 0 Alternative (Make) $ < Required A 0 Difference Required B >
Transcribed Image Text:Lantz Family Restaurant operates in a suburb of a major city. Recently, the managers at Lantz have noticed an increase in the use of delivery apps such as Grubhub and DoorDash by their customers. The average fee paid by Lantz for this service currently is $6 per delivery. The managers are considering starting their own delivery service that they estimate would attract about 75 percent of the current deliveries. (Not all customers will switch, even though the service would be free, because of the convenience of the app, habit, and other factors.) Estimates by the financial consultant to Lantz are that the cost of the service, if provided by Lantz, would be $2.30 per delivery and an incremental $1,350 per month fixed costs. In an average month, 480 orders Lantz receives are to be delivered. Required: a. Prepare a schedule that shows the differential costs. b. Should Lantz Family Restaurant provide their own delivery service or continue to rely on other firms? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule that shows the differential costs. (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Cost to buy Variable costs Incremental fixed costs Total costs Status Quo (Buy) $ 0 Alternative (Make) $ < Required A 0 Difference Required B >
Lantz Family Restaurant operates in a suburb of a major city. Recently, the managers at Lantz have noticed an increase in the use of delivery apps such as Grubhub and DoorDash by their customers. The average fee paid by Lantz for this service currently is $6 per delivery. The managers are considering starting their own delivery service that they estimate would attract about 75 percent of the current deliveries. (Not all customers will switch, even though the service would be free, because of the convenience of the app, habit, and other factors.) Estimates by the financial consultant to Lantz are that the cost of the service, if provided by Lantz, would be $2.30 per delivery and an incremental $1,350 per month fixed costs. In an average month, 480 orders Lantz receives are to be delivered. Required: a. Prepare a schedule that shows the differential costs. b. Should Lantz Family Restaurant provide their own delivery service or continue to rely on other firms? Complete this question by entering your answers in the tabs below. Required A Required B Should Lantz Family Restaurant provide their own delivery service or continue to rely on other firms? Lantz Family Restaurant's decision < Required A Required B >
Transcribed Image Text:Lantz Family Restaurant operates in a suburb of a major city. Recently, the managers at Lantz have noticed an increase in the use of delivery apps such as Grubhub and DoorDash by their customers. The average fee paid by Lantz for this service currently is $6 per delivery. The managers are considering starting their own delivery service that they estimate would attract about 75 percent of the current deliveries. (Not all customers will switch, even though the service would be free, because of the convenience of the app, habit, and other factors.) Estimates by the financial consultant to Lantz are that the cost of the service, if provided by Lantz, would be $2.30 per delivery and an incremental $1,350 per month fixed costs. In an average month, 480 orders Lantz receives are to be delivered. Required: a. Prepare a schedule that shows the differential costs. b. Should Lantz Family Restaurant provide their own delivery service or continue to rely on other firms? Complete this question by entering your answers in the tabs below. Required A Required B Should Lantz Family Restaurant provide their own delivery service or continue to rely on other firms? Lantz Family Restaurant's decision < Required A Required B >
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