Question 4 McTavish Transportation loads Intermodal contain size load of 60 feet long x 8 feet wide x 8 feet high Short

FINANCIAL ACCOUNTING
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Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Question 4
McTavish Transportation loads Intermodal containers onto railcars. Each railcar can accommodate a maximum
size load of 60 feet long x 8 feet wide x 8 feet high. McTavish only loads three sized of intermodal containers:
Short
Standard
20 x 8 x 8
10 x 8 x 8
Container size (L x W x H) (in feet)
Price charged to customer:
Variable cost per container
$ 520
280
$ 900
300
Long
55 x 8 x 8
$ 2,100
400
McTavish currently has space available on 10,000 railcars. No additional railcars are available.
Fixed costs related to loading and the 10,000 railcars is $8,000,000
Various customers have the following containers to be loaded. Total demand is as follows:
36,000 containers
18,000 containers
3,000 containers
Short:
Standard:
Long:
McTavish can pick and choose which containers are loaded and which customers to accept.
Required:
A. How many rail cars would be required to satisfy all of the current demand?
B. How many of each container type should McTavish load?
Transcribed Image Text:Question 4 McTavish Transportation loads Intermodal containers onto railcars. Each railcar can accommodate a maximum size load of 60 feet long x 8 feet wide x 8 feet high. McTavish only loads three sized of intermodal containers: Short Standard 20 x 8 x 8 10 x 8 x 8 Container size (L x W x H) (in feet) Price charged to customer: Variable cost per container $ 520 280 $ 900 300 Long 55 x 8 x 8 $ 2,100 400 McTavish currently has space available on 10,000 railcars. No additional railcars are available. Fixed costs related to loading and the 10,000 railcars is $8,000,000 Various customers have the following containers to be loaded. Total demand is as follows: 36,000 containers 18,000 containers 3,000 containers Short: Standard: Long: McTavish can pick and choose which containers are loaded and which customers to accept. Required: A. How many rail cars would be required to satisfy all of the current demand? B. How many of each container type should McTavish load?
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