Your small remodeling business has two work vehicles. One is a small passenger carused for job-site visits and for other general business purposes. The other is a heavytruck used to haul equipment. The car gets 25 miles per gallon (mpg). The truck gets 10mpg. You want to improve gas mileage to save money, and you have enough money toupgrade one vehicle. The upgrade cost will be the same for both vehicles. An upgradedcar will get 40 mpg; an upgraded truck will get 12.5 mpg. The cost of gasoline is $3.60per gallon. Calculate the annual fuel savings, in gallons, for the truck and car assumingboth vehicles are driven 11,000 miles per year. (Round your answers to 2 decimalplaces, e.g., 32.16.)TruckCarFuel savingsO TruckO Cargallons per yeargallons per yearAssuming an upgrade is a good idea in the first place, which one should you upgrade?Both vehicles are driven 11,000 miles per year.

Answer to Question:- Fuel savings [ Gallons per year before upgradation - Gallons per year…

Answered: Your small remodeling business has two…

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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3. Bill Braddock is considering opening a Fast 'n Clean Car Service Center, He estimates that the following costs will be incurred during his first year of operations: Rent $9,200, Depreciation on equipment $7,000, Wages $16,400, Motor oil $2.00 per quart. He estimates that each oil change will require 5 quarts of oil. Oil filters will cost $3.00 each. He must also pay The Fast 'n Clean Corporation a franchise fee of $1.10 per oil change, since he will operate the business as a franchise. In addition, utility costs are expected to behave in relation to the number of oil changes as follows: Number of Oil Changes 4,000 6,000 9,000 Utility Costs $ 6,000 $7,300 $ 9,600 12,000 $12,600 $15,000 14,000 Bill Braddock anticipates that he can provide the oil change service with a filter at $25 each. Instructions: (a) Using the high-low method, determine variable costs per unit and total fixed costs. (b) Determine the break-even point in number of oil changes and sales dollars. (c) Without regard…
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Manji
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