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Hart Company sells and delivers ofce furniture across Western Canada. The costs associated with the acquisition and annual operation of a delivery


Hart Company sells and delivers office furniture across Western Canada. The costs associated with the acquisition and annual operation of a delivery truck are given below:

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Screen Shot 2018-04-03 at 9.24.16 PM.png

Hart Company sells and delivers office furniture across Western Canada. The costs associated with the acquisition and annual operation of a delivery truck are given below: Insuranoe $1.351 Licences $ 235 Taxes {vehicle}. $ 134 Garage rent for parking [per truck] $1.34D Depreciation {$28,500 + 5 years] $5.?EIIJ Gasoline, oil, tires, and repairs 9.: D.25.I'km
Required: 1. Assume that Hart Company owns one thck that has been driven Eflflflfl kilometres during the first year.
Compute the average cost per kilometre of owning and operating the truck. [Round your answer to 2
decimal places.) 2. Not available in Connect. 3. Assu me that the company decides to use the tmck during the second year. Near year—end, an order is
received from a customer over LUBE] kilometers away. Il.|"|.|lhet costs from the previous list are relevant in a
decision between using the tmck to make the delivery and having the delivery done commeroielty?
[Round your answer to 2 decimal places.) Ii. Occasionally. the company could use two trucks at the same time. For this reason, some thought is
being given to purchasing a second buck. The total kilometers driven would be the same as if only one
truck were owned. What costs from the previous list are relevant to a decision about whether to
purchase the second tmck’? _:|

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