6. Laura Riley manages a fleet of 225 delivery trucks for Poole Corporation. 1(Click the icon to view additional information.) Requirement 1. Which alternative will maximize Poole's short-term operating income? In order to maximize short-term operating income, Poole Corporation should because the variable cost of outsourcing to FMS results in (2) |(1) of Requirement 2. What qualitative factors should Poole consider before making a final decision? ○ A. Will laying off five employees hurt the morale and productivity of other employees remaining with Poole? ○ B. Will FMS provide speedy maintenance and repairs? ○ C. Will FMS provide the level of service Poole needs? ○ D. Will FMS quickly and satisfactorily handle calls and questions from Poole's employees who are driving the trucks? ○ E. All of the above OF. None of the above Riley performed the following analysis: 2(Click the icon to view the outsourcing decision analysis.) Read the requirements³. 1: More Info Riley must decide whether the company should outsource the fleet management function. If she outsources to Fleet Management Services (FMS), FMS will be responsible for maintenance and scheduling activities. This alternative would require Riley to lay off her five employees. However, her own job would be secure; she would be Poole's liaison with FMS. If she continues to manage the fleet, she will need fleet-management software that costs $8,000 per year to lease. FMS offers to manage this fleet for an annual fee of $375,000. 2: Data Table 3: Requirements 1. Which alternative will maximize Poole's short-term operating income? 2. (1) O What qualitative factors should Poole consider before making a final decision? O outsource to FMS (2) O O additional costs of O continue to manage the fleet in-house O a cost savings of Retain In-House Outsource To FMS Difference Annual leasing fee for software $ Annual maintenance of trucks 8,000 147.000 $ 8,000 147,000 Total annual salaries of five laid-off employees 180,000 180,000 $ 375,000 Fleet Management Service's annual fee (375,000) $ 335,000 $ 375,000 $ (40,000) Total differential cost of outsourcing

6. Laura Riley manages a fleet of 225 delivery trucks for Poole Corporation. 1(Click the icon to view additional information.) Requirement 1. Which alternative will maximize Poole's short-term operating income? In order to maximize short-term operating income, Poole Corporation should because the variable cost of outsourcing to FMS results in (2) |(1) of Requirement 2. What qualitative factors should Poole consider before making a final decision? ○ A. Will laying off five employees hurt the morale and productivity of other employees remaining with Poole? ○ B. Will FMS provide speedy maintenance and repairs? ○ C. Will FMS provide the level of service Poole needs? ○ D. Will FMS quickly and satisfactorily handle calls and questions from Poole's employees who are driving the trucks? ○ E. All of the above OF. None of the above Riley performed the following analysis: 2(Click the icon to view the outsourcing decision analysis.) Read the requirements³. 1: More Info Riley must decide whether the company should outsource the fleet management function. If she outsources to Fleet Management Services (FMS), FMS will be responsible for maintenance and scheduling activities. This alternative would require Riley to lay off her five employees. However, her own job would be secure; she would be Poole's liaison with FMS. If she continues to manage the fleet, she will need fleet-management software that costs $8,000 per year to lease. FMS offers to manage this fleet for an annual fee of $375,000. 2: Data Table 3: Requirements 1. Which alternative will maximize Poole's short-term operating income? 2. (1) O What qualitative factors should Poole consider before making a final decision? O outsource to FMS (2) O O additional costs of O continue to manage the fleet in-house O a cost savings of Retain In-House Outsource To FMS Difference Annual leasing fee for software $ Annual maintenance of trucks 8,000 147.000 $ 8,000 147,000 Total annual salaries of five laid-off employees 180,000 180,000 $ 375,000 Fleet Management Service's annual fee (375,000) $ 335,000 $ 375,000 $ (40,000) Total differential cost of outsourcing

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 9PA: Hong Publishing has purchased Lang Publishing. After reviewing titles from both companies, a...

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