What are the annual additional benefits of the new system

Assignment Help Cost Accounting
Reference no: EM13936990

Quality improvement, relevant costs and revenues, service.

Colombe-Déménagements SA is a removals company that transports household goods from one Belgian city to another. It measures service quality in terms of (a) time required to transport goods, (b) on-time delivery (within two days of agreed-upon delivery date) and (c) lost or damaged shipments. Colombe-Déménagements is considering investing in a new scheduling and tracking system costing €160 000 per year that should help it improve performance with respect to items (b) and (c). The following information describes Colombe-Déménagements' current performance and the expected performance if the new system is implemented:

 

Currentperformance

Future expected performance

On-time delivery performance

85%

95%

Variable costs per carton lost or damaged

€60

€60

Number of cartons lost or damaged per year

3000 cartons

1000 cartons

Colombe-Déménagements expects that each percentage point increase in on-time perform- ance will result in sales increases of €20 000 per year. Colombe-Déménagements' contribution margin percentage is  45%.

Required

1. What are the annual additional costs to Colombe-Déménagements of choosing the new scheduling and tracking system?

2. What are the annual additional benefits of the new system?

3. Should Colombe-Déménagements acquire the new system?

Reference no: EM13936990

Questions Cloud

Describe one organism found in the paleozoic seas : Describe how natural selection acted upon the peppered moth in England? What are two theories about why amphibians began to colonize land? What group did amphibians evolve from?
Explain the tree traversals in all orders : If the node 30 is deleted, the erase algorithm selects which node as the replacement node?
A ticket is drawn at random. : Tickets numbered 1 to 20 are mixed up and then a ticket is drawn at random. What is the probability that the ticket drawn has a number which is a multiple of 3 or 5?
Benefits of co-working and attract more membership : What can Banyule DigiDECL do to educate more people about the benefits of co-working and attract more membership? What can they do to clearly convey their point of difference? (Amy)
What are the annual additional benefits of the new system : What are the annual additional benefits of the new system? Should Colombe-Déménagements acquire the new system?
Find the value : Find the value of each of the following expression
The changing face of retailing : The changing face of retailing: How department stores and discount stores are evolving. This report should cover the historical development of department stores and discount stores.
Explain components of our immune system : Explain the components of our immune system involved in allergic reactions, and how does treatment of allergies manage to control them?
Complete a financial analysis and assessment of a company : It will require you to complete a full financial analysis and assessment of a company listed on the Australian Stock Exchange. You may select any company listed on the Australian Stock Exchange EXCEPT Telstra and TOLL

Reviews

Write a Review

Cost Accounting Questions & Answers

  Hig-low method to estimate companys utilities cost behavior

Use the hig-low method to estimate the companys utilities cost behavior and state the cost formula and predict the utilities cost for a month in which 12,000 pounds of the product were produced

  What are the implications of reducing each of the costs

What are the implications of reducing each of the costs? For example, if the company reduces direct materials costs, it may have to do so by purchasing lower-quality materials.

  Determine the cost assigned to ending inventory

Determine the cost assigned to ending inventory and to cost of goods sold using LIFO and Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.

  What was it''s net income for 2013

Compute the amount of retained earnings at the end of 2013 and If the amount of retained earnings at the beginning of 2013 was $30,000, and $12,000 in cash dividends were declared and paid during 2013, what was its net income for 2013?

  Present a balance sheet for the new partnership

Journalize the additional entries to record Evans entrance to the partnership and present a balance sheet for the new partnership as of June 1, 2012.

  Compute the cost of goods destroyed

Zidek Corp. requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $38,000. Purchases since January 1 were $92,000.

  How many slots should wzmu sell in advance

How many slots should WZMU sell in advance? and now assume that if a slot is not sold in advance and is not sold at the last minute, it will be used for a promotional message worth $2500. Now how many slots would WZMU sell in advance?

  Compute the overhead controllable and volume variances

Compute the direct labor variance, including its rate and efficiency variances and compute the overhead controllable and volume variances.

  What is the low-cost hedging alternative for plantronics

What is the low-cost hedging alternative for Plantronics? What is the cost?

  Analyze the recomputed basis of the property

Compute the adjusted basis of the property and analyze the recomputed basis of the property.

  Information regarding the equipment

Tara's Medical Services purchases a large machine. The cost of the equipment is $85,000. It has a trade-in value of $15,000 with an estimated 7-year useful life. If this is the only equipment Tara's Medical Services has, after the one year of use, th..

  Would you classify a realty business like ruby river

Would you classify a realty business like Ruby River as a manufacturing, merchandising, or service business and analyzing the interrelationships among the four financial statements, determine the proper amounts for (a) through (o).

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd