Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffy's Maid Service. Tim rents an average of 50 rooms for each of365 nights (365 × 50 equals the total rooms rented for the year). Tim's cost to clean a room is $13.00. The Duffy's Maid Service quote is $19.00 per room plus a fixed cost of $26,000 for sundry itemssuch as uniforms with the motel's name. Tim's annual fixed cost for space, equipment, and supplies is $61,000.Based on the given information related to costs for each of the options, the crossover point for Tim = room nights (round your response to the nearest whole number).

the crossover point for Tim is approximately 185,167 room nights.Explanation:To find the crossover…

Answered: Tim Urban, owner/manager of Urban's…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffy's Maid Service. Tim rents an average of 50 rooms for each of 365 nights (365 x 50 equals the total rooms rented for the year). Tim's cost to clean a room is $13.00. The Duffy's Maid Service quote is $18.00 per room plus a fixed cost of $26,000 for sundry items such as uniforms with the motel's name. Tim's annual fixed cost for space, equipment, and supplies is $61,000. Based on the given information related to costs for each of the options, the crossover point for Tim = ☐ room nights (round your response to the nearest whole number).
Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffy's Maid Service. Tim rents an average of 50 rooms for each of 365 nights (365x 50 equals the total rooms rented for the year). Tim's cost to clean a room is $13.00. The Duffy's Maid Service quote is $18.00 per room plus a fixed cost of $25.000 for sundry items such as uniforms with the motel's name. Tim's annual fixed cost for space, equipment, and supplies is $61,000. Based on the given information related to costs for each of the options, the crossover point for Tim-room nights (round your response to the nearest whole number) if the number of room nights is less than the crossover point, then is the best option available to Tim Based on the given room nights that Tim expects to rent (18,250), the best option is
Janice Huffman has decided to start Rundle Cleaning, a residential housecleaning service company. She is able to rent cleaning equipment at a cost of $760 per month. Labor costs are expected to be $90 per house cleaned and supplies are expected to cost $6 per house. Required a. Determine the total expected cost of equipment rental and the average expected cost of equipment rental per house cleaned, assuming that Rundle Cleaning cleans 20, 30, or 40 houses during one month. Is the cost of equipment a fixed or a variable cost? b. Determine the total expected cost of labor and the average expected cost of labor per house cleaned, assuming that Rundle Cleaning cleans 20, 30, or 40 houses during one month. Is the cost of labor a fixed or a variable cost? c. Determine the total expected cost of supplies and the average expected cost of supplies per house cleaned, assuming that Rundle Cleaning cleans 20, 30, or 40 houses during one month. Is the cost of supplies a fixed or a variable cost? d.…
Janice Huffman has decided to start Rundle Cleaning, a residential housecleaning service company. She is able to rent cleaning equipment at a cost of $760 per month. Labor costs are expected to be $90 per house cleaned and supplies are expected to cost $6 per house. Required a. Determine the total expected cost of equipment rental and the average expected cost of equipment rental per house cleaned, assuming that Rundle Cleaning cleans 20, 30, or 40 houses during one month. Is the cost of equipment a fixed or a variable cost? b. Determine the total expected cost of labor and the average expected cost of labor per house cleaned, assuming that Rundle Cleaning cleans 20, 30, or 40 houses during one month. Is the cost of labor a fixed or a variable cost? c. Determine the total expected cost of supplies and the average expected cost of supplies per house cleaned, assuming that Rundle Cleaning cleans 20, 30, or 40 houses during one month. Is the cost of supplies a fixed or a variable cost? d.…
Jason Bartlett is the managing partner of a business that has just finished building a 60-room motel. Bartlett anticipates that he will rent these rooms for 15,000 nights next year (or 15,000 room-nights). All rooms are similar and will rent for the same price. Bartlett estimates the following operating costs for next year: Variable operating costs $ 5 per room-night Fixed costs Salaries and wages $171,000 Maintenance of building and pool 42,000 Other operating and administration costs 162,000 Total fixed costs $375,000 The capital invested in the motel is $900,000. The partnership's target return on investment is 25%. Bartlett expects demand for rooms to be uniform throughout the year. He plans to price the rooms at full cost plus a markup on full cost to earn the target return on investment. 1. What price should Bartlett charge for a room-night? What is the markup as a percentage of the full cost of a room-night? 2.…
Crepe Creations (CC) is considering franchising its unique brand of crepes to stall- holders on Hermoza Beach, which is four miles long. CC estimates that, on an average day, there are 1,000 sunbathers evenly spread along the beach and each sunbather will buy one crepe per day provided that the price plus any disutility cost does not exceed $5. Each sunbather incurs a disutility cost of getting up from resting to get a crepe and returning to their beach spot of 25 cents for every 1⁄4 mile the sunbather has to walk to get to the CC stall. Each crepe costs $0.50 to make and CC incurs a $40 overhead cost per day to operate a stall. What price should CC charge if it only has one store? What profit would CC gain if it only has one store? How many franchises should CC award given that it determines the prices the stall holders can charge and that it will have a profit-sharing royalty scheme with the stall holders? What is price of a crepe at each stall?
Olga was planning to set up a business where she would purchase paintings for $1,050 per unit and sell them for $1,800 per unit. She wanted to conduct a break-even analysis and identified the following costs for running her business: $4,470.00 per month for store leasing, $54 per month website hosting fee, $5,150 per month for staff salary, $2,040 per month for advertising costs, and $25 per unit for labour charges to pack the paintings. a. How many paintings would she have to sell per month to break-even? Round up to the next whole number b. If she wants to make a profit of $24,000 in a month, how many paintings would she have to sell? Round up to the next whole number
A new motel with 15 rooms is under construction. The cost of each unit is$323.00. Each unit will require an electrical breaker at $8.25. An electricalwall socket, outlet box, and cover are needed for each unit at $3.97. Eighteenfeet of electrical wire at $0.24 per foot are needed for each unit. The labor toinstall one unit is 4 hours, and the labor is charged at the rate of $31.00 perhour. There is a 6% sales tax on everything. Write a bill for the job of puttinga through-the-wall unit in each room.
John Brown is the managing partner of a business that has just finished building a 60-room motel. Brown anticipates that he will rent these rooms for 20,000 nights next year (or 20,000 room-nights). All rooms are similar and will rent for the same price. Brown estimates the following operating costs for next year: Variable operating costs $ 3 per room-night Fixed costs Salaries and wages $173,000 Maintenance of building and pool 40,000 Other operating and administration costs 127,000 Total fixed costs $340,000 The capital invested in the motel is $1,200,000. The partnership's target return on investment is 20%. Brown expects demand for rooms to be uniform throughout the year. He plans to price the rooms at full cost plus a markup on full cost to earn the target return on investment. Requirements 1. What price should Brown charge for a room-night? What is the markup as a percentage of…
Sam's Auto Shop services and repairs a particular brand of foreign automobile. Sam uses oil filters throughout the year. The shop operates 52 weeks per year and weekly demand is 130 filters. Sam estimates that it costs $20 to place an order and his annual holding cost rate is $3 per oil filter. Currently, Sam orders in quantities of 650 filters. Calculate the total annual costs associated with Sam's current ordering policy. Total annual costs = $
Tupper Inc. and Victory Inc. are two small clothing companies that are considering leasing a dyeing machine together. The companies estimated that in order to meet production, Tupper needs the machine for 950 hours and Victory needs it for 700 hours. If each company rents the machine on its own, the fee will be $85 per hour of usage. If they rent the machine together, the fee will decrease to $80 per hour of usage. Read the requirements. Requirements 1. Calculate Tupper's and Victory's respective share of fees under the stand-alone cost-allocation method. 2. Calculate Tupper's and Victory's respective share of fees using the incremental cost-allocation method assuming (a) Tupper ranked as the primary party and (b) Victory ranked as the primary party. 3. Calculate Tupper's and Victory's respective share of fees using the Shapley value method. 4. Which method would you recommend Tupper and Victory use to share the fees? - X
The owner of a car wash wants to increase his Revenue. He decides to reduce his price by $2.00. Currently he charges $10.99 for the Deluxe Car wash. In a typical week he sells 70 deluxe car washes. He knows from previous experience his sales will increase to 110 deluxe car washes per week. The other variable costs per car wash are $1.99 which includes all chemicals and labour costs. What percentage must his sales increase by to maintain his current Contribution ? 28.6% 28.2% 30.5% 32% None of these are correct or cannot be determined D View Feedback

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