A large logistics fleet company such as UPS, DHL or FedEx is trying to figure...
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Accounting
A large logistics fleet company such as UPS, DHL or FedEx is trying to figure out supply chain costs for a small supply chain facility. You have been asked to step in as a supply chain consultant. The company has identified the following costs.
Number of trucks used per day in the fleet: 20 trucks (1 driver each)
Cost per delivery driver for each truck per hour: $10
Number of hours of delivery per day: 10 hours per day
Number of Driving days per month: 20 days per month
Average company revenues per delivery: $6
Truck fuel costs and wear and tear per item delivery: $1.00
Administrative salaries per month $48,000
Facility maintenance per month: $2000
Identify which of the above are fixed costs and which are variable costs. Explain why its a fixed or variable cost. Next, used the identification to calculate the Break Even Point, i.e. the number of items each truck driver needs to deliver per month, per day, and per hour (based on a 10 hour workday) to break even, that is, cover all its costs and start generating a profit?
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