Preston Concrete is a major supplier of concrete to residential and commercial builders in the Pacific Northwest. The. company's general pricng poliy s to et prices at $126 per cubic yard. Delverie for 2020 were 390,000 cubic yards, and tota costs were: Material costs | 527,144,000 Yera operation 55,460,000 costs Administrative 51,560,000 $4,149,600 of the estimated total yard operation costs were Variable, and al of the administrative costs were fixed. In addition'to the costs above, estimated fxed defivery costs were $220,000 for the year, and estimated variable delvery costs were $8.50 per mile and $42.50 per truck hour. The. ate per mile refect the fact that more mils resultin more 925, 0i, and maintenance. The rate per truck hour reflects the fact tha trucks that are waiting at a obsite are kept Funing (5o the concrete mix won't s0idify), and drivers continue to get paid during that time. Near the end of 2020, Fairview Construction Company asked for a delivery of 5,300 cubic yards of concrete but was unwiling to pay the reguiar prie; 1t was only willng to pay. 477 per cubic yard. Preston estimated that the job would require 7,000 miles o driving and 220 truck hours. The housing market in the Pacific Northwest had siowsd during recent months, eaving Preston with enough capacity to fil the order; but s sales manager was reuctant to commit to such a reduced price. REQUIRED 1 Preston accepted the offer, what would the profitor loss be (enter a loss s 2 negative number)? Preston Concrete is a major supplier of concrete to residentialand commercial builders in the Pacific Northwest. Thecompany's general pricing policy is to set prices at $126 percubic yard. Deliveries for 2020 were 390,000 cubic yards,and total costs were:Material costs $27,144,000Yardoperation$5,460,000costsAdministrative$1,560,000costs$4,149,600 of the estimated total yard operation costs werevariable, and all of the administrative costs were fixed. Inaddition to the costs above, estimated fixed delivery costswere $220,000 for the year, and estimated variable deliverycosts were $8.50 per mile and $42.50 per truck hour. Therate per mile reflects the fact that more miles result in moregas, oil, and maintenance. The rate per truck hour reflectsthe fact that trucks that are waiting at a jobsite are keptrunning (so the concrete mix won't solidify), and driverscontinue to get paid during that time.Near the end of 2020, Fairview Construction Company askedfor a delivery of 5,300 cubic yards of concrete but wasunwilling to pay the regular price; it was only willing to pay$77 per cubic yard. Preston estimated that the job wouldrequire 7,000 miles of driving and 220 truck hours. Thehousing market in the Pacific Northwest had slowed duringrecent months, leaving Preston with enough capacity to fillthe order, but its sales manager was reluctant to commit tosuch a reduced price.REQUIREDIf Preston accepted the offer, what would the profit or loss be(enter a loss as a negative number)?

When determining whether to accepting or rejecting a particular request, compare the purchase price…

Preston Concrete is a major supplier of concrete to residential and commercial builders in the Pacific Northwest. The. company's general pricng poliy s to et prices at $126 per cubic yard. Delverie for 2020 were 390,000 cubic yards, and tota costs were: Material costs | 527,144,000 Yera operation 55,460,000 costs Administrative 51,560,000 $4,149,600 of the estimated total yard operation costs were Variable, and al of the administrative costs were fixed. In addition'to the costs above, estimated fxed defivery costs were $220,000 for the year, and estimated variable delvery costs were $8.50 per mile and $42.50 per truck hour. The. ate per mile refect the fact that more mils resultin more 925, 0i, and maintenance. The rate per truck hour reflects the fact tha trucks that are waiting at a obsite are kept Funing (5o the concrete mix won't s0idify), and drivers continue to get paid during that time. Near the end of 2020, Fairview Construction Company asked for a delivery of 5,300 cubic yards of concrete but was unwiling to pay the reguiar prie; 1t was only willng to pay. 477 per cubic yard. Preston estimated that the job would require 7,000 miles o driving and 220 truck hours. The housing market in the Pacific Northwest had siowsd during recent months, eaving Preston with enough capacity to fil the order; but s sales manager was reuctant to commit to such a reduced price. REQUIRED 1 Preston accepted the offer, what would the profitor loss be (enter a loss s 2 negative number)?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Preston Concrete is a major supplier of concrete to residential and commercial builders in the Pacific Northwest. The. company's general pricng poliy s to et prices at $126 per cubic yard. Delverie for 2020 were 390,000 cubic yards, and tota costs were: Material costs | 527,144,000 Yera operation 55,460,000 costs Administrative 51,560,000 $4,149,600 of the estimated total yard operation costs were Variable, and al of the administrative costs were fixed. In addition'to the costs above, estimated fxed defivery costs were $220,000 for the year, and estimated variable delvery costs were $8.50 per mile and $42.50 per truck hour. The. ate per mile refect the fact that more mils resultin more 925, 0i, and maintenance. The rate per truck hour reflects the fact tha trucks that are waiting at a obsite are kept Funing (5o the concrete mix won't s0idify), and drivers continue to get paid during that time. Near the end of 2020, Fairview Construction Company asked for a delivery of 5,300 cubic yards of concrete but was unwiling to pay the reguiar prie; 1t was only willng to pay. 477 per cubic yard. Preston estimated that the job would require 7,000 miles o driving and 220 truck hours. The housing market in the Pacific Northwest had siowsd during recent months, eaving Preston with enough capacity to fil the order; but s sales manager was reuctant to commit to such a reduced price. REQUIRED 1 Preston accepted the offer, what would the profitor loss be (enter a loss s 2 negative number)?

Preston Concrete is a major supplier of concrete to residential
and commercial builders in the Pacific Northwest. The
company's general pricing policy is to set prices at $126 per
cubic yard. Deliveries for 2020 were 390,000 cubic yards,
and total costs were:
Material costs $27,144,000
Yard
operation
$5,460,000
costs
Administrative
$1,560,000
costs
$4,149,600 of the estimated total yard operation costs were
variable, and all of the administrative costs were fixed. In
addition to the costs above, estimated fixed delivery costs
were $220,000 for the year, and estimated variable delivery
costs were $8.50 per mile and $42.50 per truck hour. The
rate per mile reflects the fact that more miles result in more
gas, oil, and maintenance. The rate per truck hour reflects
the fact that trucks that are waiting at a jobsite are kept
running (so the concrete mix won't solidify), and drivers
continue to get paid during that time.
Near the end of 2020, Fairview Construction Company asked
for a delivery of 5,300 cubic yards of concrete but was
unwilling to pay the regular price; it was only willing to pay
$77 per cubic yard. Preston estimated that the job would
require 7,000 miles of driving and 220 truck hours. The
housing market in the Pacific Northwest had slowed during
recent months, leaving Preston with enough capacity to fill
the order, but its sales manager was reluctant to commit to
such a reduced price.
REQUIRED
If Preston accepted the offer, what would the profit or loss be
(enter a loss as a negative number)?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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.