Mathes Corporation manufactures paper products. The company operates a landfill, which it uses to dispose of nonhazardous The trash is hauled from the two nearby manufacturing facilities in trucks that can carry up to four tons of trash in a load. The la operation requires certain preparation activities regardless of the amount of trash in a truck (i.e., for each load). The budget for andfill for next year follows. volume of trash Preparation costs (varies by loads) other variable costs (varies by tons) Fixed costs 1, 200 tons (300 loads) $ 54,000 54,000 178,000 Total budgeted costs $286, 000 Mathes is considering making the landfill a profit center and charging the manufacturing plants for disposal of the trash. The land sufficient capacity to operate for at least the next 20 vears, Other landfills are available in the area (both private and muunicipal)
Mathes Corporation manufactures paper products. The company operates a landfill, which it uses to dispose of nonhazardous The trash is hauled from the two nearby manufacturing facilities in trucks that can carry up to four tons of trash in a load. The la operation requires certain preparation activities regardless of the amount of trash in a truck (i.e., for each load). The budget for andfill for next year follows. volume of trash Preparation costs (varies by loads) other variable costs (varies by tons) Fixed costs 1, 200 tons (300 loads) $ 54,000 54,000 178,000 Total budgeted costs $286, 000 Mathes is considering making the landfill a profit center and charging the manufacturing plants for disposal of the trash. The land sufficient capacity to operate for at least the next 20 vears, Other landfills are available in the area (both private and muunicipal)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Mathes Corporation manufactures paper products. The company operates a landfill, which it uses to dispose of nonhazardous trash.
The trash is hauled from the two nearby manufacturing facilities in trucks that can carry up to four tons of trash In a load. The landfill
operation requires certain preparation activities regardless of the amount of trash in a truck (Le., for each load). The budget for the
landfill for next year follows.
volume of trash
Preparation costs (varies by loads)
other variable costs (varies by tons)
Fixed costs
1,200 tons
(300 loads)
$ 54,000
54,000
178,000
$286, 000
Total budgeted costs
Mathes is considering making the landfill a profit center and charging the manufacturing plants for disposal of the trash. The landfill has
sufficlent capacity to operate for at least the next 20 years. Other landfills are available in the area (both private and municipal), and
each plant would be free to declde which landfill to use.
Required:
a. Compute the optimal transfer price,
b. Compute the total variable costs for a three-ton load of trash from one of the plants.
Complete this questlon by enterlng your answers In the tabs below.
Required A
Required B
Compute the total variable costs for a 3-ton load of trash from one of the plants. (Do not round intermediate calculations,)
Total variable cost
per load
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Transcribed Image Text:Mathes Corporation manufactures paper products. The company operates a landfill, which it uses to dispose of nonhazardous trash.
The trash is hauled from the two nearby manufacturing facilities in trucks that can carry up to four tons of trash In a load. The landfill
operation requires certain preparation activities regardless of the amount of trash in a truck (Le., for each load). The budget for the
landfill for next year follows.
volume of trash
Preparation costs (varies by loads)
other variable costs (varies by tons)
Fixed costs
1,200 tons
(300 loads)
$ 54,000
54,000
178,000
$286, 000
Total budgeted costs
Mathes is considering making the landfill a profit center and charging the manufacturing plants for disposal of the trash. The landfill has
sufficlent capacity to operate for at least the next 20 years. Other landfills are available in the area (both private and municipal), and
each plant would be free to declde which landfill to use.
Required:
a. Compute the optimal transfer price,
b. Compute the total variable costs for a three-ton load of trash from one of the plants.
Complete this questlon by enterlng your answers In the tabs below.
Required A
Required B
Compute the total variable costs for a 3-ton load of trash from one of the plants. (Do not round intermediate calculations,)
Total variable cost
per load
< Prev
12 of 22
Next >
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