Kim Epson operates a full-service car wash, which operates from 8 A.M. to 8 P.M. seven days a week. The car wash has two stations: an automatic washing and drying station that can handle 30 cars per hour and an interior cleaning station that can handle 210 cars per day. Based on a recent year-end review of operations, Kim estimates that future demand for the interior cleaning station for the seven days of the week, expressed in the average number of cars per day, would be as follows: Kim should not Day Cars should Mon. 160 Tues. 180 Wed. 150 Thurs. 140 Fri. 270 By installing additional equipment (at a cost of $60,000) Kim can increase the capacity of the interior cleaning to 300 cars per day. Each car wash generates a pretax contribution of $3.00. Should Kim install the additional equipment if she expects a pretax payback period of three years or less? install the additional equipment because the payback period is years. (Enter your response rounded to two decimal places.) Sat. 260 O Sun. 260

CRUISE MINI CASE: Sunshine Cruise Lines is a cruise operator that offers three- to seven-day cruises along five Caribbean routes. It has developed a reputation as a party cruise operator and the majority of its revenue comes from vacationing college students. This type of customer demand is highly cyclical, and Sunshine finds that repeat purchase is high while its consumers are in college, but practically disappears after graduation. In an effort to encourage its customers to continue taking Sunshine Cruises after they have graduated, the cruise operator has begun offering Adventure Cruises, with port stops on islands known for eco-tourism and biodiversity, both on land and off shore, appealing to young professionals who like to hike and scuba dive or snorkel. In contrast to its party cruises, Sunshine focuses its marketing message for Adventure Cruises on activities at port stops and the convenience of being able to explore several Caribbean destinations from the comfort of a single…

The manager of a car wash must decide whether to have one or two wash lines. One line will mean a fixed cost of $6,000 a month, and two lines will mean a fixed cost of $10,500 a month. Each line would be able to process 15 cars an hour. Variable costs will be $3 per car, and revenue will be $5.95 per car. The manager projects an average demand of between 14 and 18 cars anhour. Would you recommend one or two lines? The car wash is open 300 hours a month.

Letty's Costume Rentals, founded by Letty Scott in the summer of 2018, has experienced steady growth and success. Recognizing the limitations of a manual system, Ms. Scott aims to improve the efficiency and effectiveness of her business by implementing a computerized system. This system will enhance the customer experience by tracking costume rentals (both present and past), customers, and their payments.With the business thriving, especially during the Carnival and Summer seasons, Ms. Scott has expanded her team by hiring two employees. She realizes that a computerized database system is essential to handle the increasing demand and streamline operations. Such a system will also allow for in-depth analysis of costume rental data, facilitating better and more informed business decisions. Letty’s Costume Rentals, which currently caters to adults, also plans to expand its inventory to include children’s costumes. The current rental process involves a customer inquiring about a specific…

Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to month as the tourist trade in the community varies. The utility costs for one of the company’s stores are listed below for the past six months.  Month Total Hoursof Operation Total UtilityCost January   500     $ 2,120   February   600       2,400   March   750       2,850   April   450       2,050   May   400       1,750   June   350       1,650     Required:1-a. Use the high-low method to estimate the cost behavior for the store’s utility costs. Express the cost behavior in formula form (Y= a + bX).1-b. What is the variable utility cost per hour of operation?3-a. Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the cost behavior for the store's utility cost. Express the cost behavior in formula form.3-b. What is the variable utility cost per hour of operation?4. During July, the…

northwest. The first store began operations in 1965, and the company has Happyville, Inc., operates a chain of department stores located in the steadily grown to its present size of 44 stores. Two years ago, the board of directors of Happyville approved a large-scale remodeling of its stores to attract a more upscale clientele. Before finalizing these plans, two stores were remodeled as a test. Lisa Perez assistant controller, was asked to oversee the financial reporting for these test stores, and she and other management personnel were offered bonuses based on the sales growth and profitability of these stores. While completing the financial reports, Perez discovered a sizable inventory of outdated goods that should have been discounted for sale or returned to the manufacturer. She discussed the situation with her management colleagues; the consensus was to ignore reporting this inventory as obsolete, since reporting it would diminish the financial results and their bonuses. Required:…

Show your calculations. Determine the utilization and the efficiency for each of these situations: A car wash operation processes an average of 60 cars per day. The operation has a design capacity of 100 cars per day and an effective capacity of 80 cars per day. A drive through fast food restaurant has been designed to handle 120 customers during lunchtime (12 to 2 PM) each day, but currently averages only 65 drive through customers at that time. Prior to the recession, when lines of customers were long, the restaurant actually handled a maximum of only 90 customers. Would you say that systems that have higher efficiency ratios than other systems will always have higher utilization ratios than those other systems? Explain.

An executive conference center has the physical ability to handle 1,100 participants. However, conference management personnel believe that only 1,000 participants can be handled effectively for most events. The last event, although forecasted to have 1,000 participants, resulted in the attendance of only 950 participants. What are the utilization and efficiency of the conference facility?

St. Carmen’s hospital is considering two alternatives and analyzing their consequences over a 3-year period on the hospital budget.     Alternative A = hire a pharmacist     Alternative B = Buy an automated drug delivery system machine         Alternative A’s costs are $90,000 salary plus 20% for fringe benefits per year for the next 3 years     Alternative B’s costs for the automated system are $220,000 for the first year, $35,000 for the second year, and $35,000 for the third year.     Alternative A’s savings are $150,000 per year for the next 3 years Alternative B’s savings are $120,000 per year for each of the 3 years Assuming a 5% discount rate, calculate: The net benefit of hiring a pharmacist The net benefit of the automated system The benefit-to-cost ratio of hiring a pharmacist The benefit-to-cost ratio for the automated system Which option, alternative A or alternative V, would be chosen based on the following: The net benefit calculations? Why? The…

The exclusive Swink Golf Driving Range has had astandard price of $15 per hour. The facility has 36 golfing stations,with average usage of 50%, 10 hours a day, 7 days a week. MorganSwink, the owner, would like to enhance revenue. He proposes newpricing at $10 per hour on weekdays and $20 per hour on weekends.He estimates that weekday usage will increase to 60% and weekendusage will remain at 500/o, even with the price increase. Variable costis a consistent $3 per hour. Which strategy is better?