Waste Collection to provide sold waste collection to households and businesses.

Question

Waste Collection to provide sold waste collection to households and businesses. Until recently, Evergreen had an exclusive franchise to provide this service in The City of imperial Falls contrects with Evergreen Imperial Falis, which meant that other waste collection Cost data for the moet recant year of operations for Evergreen are as follows: d of waste collected was regulated at 20 percent above the average total cost of collection firms could not operate legaly in the city. The price per poun 3 406,000 Data on oustomers for the most recent year are: Waste collected tons) subject to price regulation. Based on information from neighboring cities, the price Shat other private waste collection firms will charge is estmated to be $0.04 per pound (-$80 per ton) Evergreens CEO approached te oty counol with a proposal to chargo way costs aro alocated to households and bushesses, which wil result ndierent rates for householts and businesses. Sho p poses that adriemo costs and tuck openg costs be al caled based on me number "ustomes ths cem colecon costs e ilated based on pound-collected Tho toi ooit 11 cated households would then be divided by the estimated number of pounds collected from households to determine the cost of collection. The rate would then be 20 percent above the cost. The rate for businesses would be determined using the same calculation a. Based Intermediate calculations. Round your answer to 3 decimal places) Answer is complete and correct 0.009 O waste data from the most recent year, complete the folowing table to determine the b. Based on cost and proposal were accepted? (Do not round intermediate calculations. Round your "Average allocated cost per pound" and "Price" answers to 4 price per pound charged to households and to businesses by Evergreen for waste collection t the CEO's decimal places.) O Answer is complete but not gntirely correct. 10960 1,371 247 $ 670753 0.140s 0.024 0.1788 s 0 0305 Price

Explanation / Answer

Solution a:

Current total cost of collection = $406,000 + $1,310,000 + $326,000 = $2,042,000

Total waste collected = 4600 + 13200 = 17800 ton = 17800*2000 = 35600000 pound

Cost per pound = $2,042,000 / 35600000 = $0.0573595

Price charged per pound for waste collection by evergreen = $0.0574595*120% = $0.069

Solution b:

Allocated cost per customer:

Household = $1,371,247 / 12600 = $108.829

Businesses = $670,753 / 4200 = $159.703

Total allocated cost:

Household = $1,371,247

Businesses = $670,753

Average allocated cost per pound:

Households = $1,371,247 / 9200000 = $0.1490 per pound

Businesses = $670,753 / 26400000 = $0.0254 per pound

Price per pound:

Households = $0.14904858*120% = $0.1789 per pound

Businesses = $0.0254073106*120%= $0.0305 per pound

Determination of allocation rate for each category & allocation of cost Activity Total Cost Allocation base Quantity of allocation base Allocation rate Household Businesses Usage Allocated Costs Usage Allocated Costs Administrative and Operating cost trucks $1,716,000.00 Nos of customers 16800 $102.14286 12600 $1,287,000.00 4200 $429,000.00 Other collection costs $326,000.00 Waste collected (In Pound) 35600000 $0.00916 9200000 $84,247.19 26400000 $241,752.81 Total $2,042,000.00 $1,371,247 $670,753

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