Zume Pizza: Cost-Volume-Profit Analysis

Zume Pizza uses a combination of robots, artificial intelligence (AI), and GPS in its food trucks to deliver pizzas to customers’ houses just as the pizza is finished baking. Pizzas are actually prepared and baked in the Zume pizza truck by an employee assisted by robots. Zume Pizza started operations in April 2016 and is currently selling about 250 pizzas per day.

The pizza delivery process starts with a customer using Zume Pizza’s app to order pizza. The pizza combinations offered by Zume have been derived by analyzing customer data to offer several popular options. These preset combination recipes are programmed into Zume’s computers, so that its robots can build and bake the pizzas efficiently.

All pizza preparation and baking happens in the Zume pizza truck. Once the customer orders a pizza, a worker in the Zume food truck will toss the dough, cut the vegetables, and put on toppings. A robot will put on the pizza sauce. Each Zume pizza truck has 56 pizza ovens, which are each individually connected to the order system and the truck’s GPS. A robot will put the pizza into the designated oven exactly four minutes before the truck reaches the customer’s house. A worker will pull out the pizza when it is finished and place it into the cutter, where a robot will cut the pizza. The pizza is boxed and the pizza is delivered to the customer’s door, all within a few minutes of finishing baking. Eventually, Zume’s owners hope to use a robot to remove pizzas from the oven as well.

Assume that average selling price per pizza is about $18. To follow are estimates of costs that might be incurred by Zume Pizza in its pizza business.

Description and Cost estimate (in dollars)

• Ingredient cost per pizza: $6.00
• Truck fuel cost per delivery: $3.00
• Cost of pizza delivery truck (estimated useful life 5 years, no salvage value): $80,000
• Cost of initial software development (estimated useful life 3 years): $30,000
• Annual maintenance/update costs of software: $25,000
• Supplies cost per pizza (box, napkins, etc.): $1.00
• Cost to park pizza delivery truck per year (garage facility): $24,000
• Insurance and other regulatory costs per year: $36,000
• Cost of cofounders’ salaries per year: $150,000
• Cost to rent restaurant kitchen facility for testing and food prep (per year): $45,000
• Direct labor cost per pizza (driving truck and preparing pizza in truck): $5.00

Initial Question:

Please address the question(s) below. In your post, please support your response (why do you think so?)

From the list above, what costs would you classify as variable with respect to the cost of a Zume pizza? Are there any other variable costs you could envision that Zume might incur per pizza? Explain.

From the list above, what costs would you classify as fixed with respect to the cost of a Zume pizza? Are there any other fixed costs you could envision that Zume might incur in its pizza business? Explain.

Carpenter Cornices, Ltd., produces a wide variety of cornice moldings for windows at a plant located in Evergreen Park, Illinois. Because there are hundreds of products, some of which are made only to order, the company uses a job-order costing system. On July 1, the start of the company’s fiscal year, inventory account balances were as follows: Raw materials $ 12,700 Work in process $ 6,700 Finished goods $ 10,400 The company applies overhead cost to jobs on the basis of machine-hours. Its predetermined overhead rate for the fiscal year starting July 1 was based on a cost formula that estimated $191,400 of manufacturing overhead for an estimated activity level of 58,000 machine-hours. During the year, the following transactions were completed (Assume all purchases and services were acquired on account): a. Raw materials purchased on account, $202,000. b. Raw materials requisitioned for use in production, $164,000 (materials costing $152,500 were chargeable directly to jobs; the remaining materials were indirect). c. Costs for employee services were incurred as follows: Direct labor $ 111,000 Indirect labor $ 48,300 Sales commissions $ 34,500 Administrative salaries $ 53,500 d. Prepaid insurance expired during the year, $28,000 ($17,700 of this amount related to factory operations, and the remainder related to selling and administrative activities). e. Utility costs incurred in the factory, $25,500. f. Advertising costs incurred, $14,800. g. Depreciation recorded on equipment, $39,000. ($25,500 of this amount was on equipment used in factory operations; the remaining $13,500 was on equipment used in selling and administrative activities.) h. Manufacturing overhead cost was applied to jobs, $?. (The company recorded 31,000 machine-hours of operating time during the year.) i. Goods that had cost $326,000 to manufacture according to their job cost sheets were completed. j. Sales (all on account) to customers during the year totaled $614,000. These goods had cost $325,000 to manufacture according to their job cost sheets.1. 1.- Prepare journal entries to record the transactions for the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Prepare T-accounts for inventories, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the opening balances in your inventory accounts). Compute an ending balance in each account. (Round your intermediate calculations to 2 decimal places.) 3-a. Is Manufacturing Overhead underapplied or overapplied for the year? (Round your intermediate calculations to 2 decimal places.) 3-b. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. (Round your intermediate calculations to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Prepare an income statement for the year. (Round your intermediate calculations to 2 decimal places.)

Water will be pumped from a reservoir free surface of which is at an elevation of “z1” to reservoir the free water surface of which is at “z2”. Both of the reservoirs’ free surfaces at atmospheric pressures.Design a piping system that transmits water from the lower reservoir to the upper reservoir at a volumetric flow rate of Q (m3 /h).

Q = 200 (m3/h) Za = 10(m) Zb= 60 (m) Zc = 75 (m) L1=200 (m) L2=125 (m) "Pipe material is "Commercial Stainless Steel" "

1) Consider necesssary fittings( valves, elbows….)

2) Given data and cost elements, determine the optimum pipe diameter of the system . In order to do this:

3) Write the energy equation between z1 and z2 by taking the major losses associated with the pipe, minor losses associated with the fittings, sudden contraction, and expansion regions inside the system and the pump total head rise ”hp” into account .

4) The average velocity of the water inside your piping system should be between 0.1 and 5 m/s. 5) Calculate the head rise “hp” that must be provided by the pump.

6) Choose a pump that provides a head rise of ”hp” (that you calculated) near its most efficient working flow rate at your given flowrate Q from the local manufacturer’s catalogues.

7) Find the cost of the pipe per one meter (TL/m) and unit electricity price ( TL/kWh). Neglect cost of the pump or pumps.

8) Calculate the cost of the system for one year: Obtain the graph which shows the variation of the capital cost, the energy cost and the total cost in function of the pipe diameter for working of the pump at a rate of 24 hours/day for one year.

9) If head loss from reservoir to pump inlet is 0.8 m, where should the pump inlet be placed to avoid cavitation for water at 15°C, pv= 1.71 kPa absolute?.

10)Check the absolute pressure at point C.

11) Draw a schematic representation of the system.

12) Give necessary technical drawings of the pipe and give schematic representations of the chosen minor loss elements.

13) Give the performance characteristics chart of the chosen pump and the technical drawing of it.

In 2018, the Marion Company purchased land containing a mineral mine for $1,150,000. Additional costs of $448,000 were incurred to develop the mine. Geologists estimated that 310,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $110,000.

To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $102,300. These structures have a useful life of 10 years. The structures cannot be moved after the ore has been removed and will be left at the site. In addition, new equipment costing $51,500 was purchased and installed at the site. Marion does not plan to move the equipment to another site, but estimates that it can be sold at auction for $5,000 after the mining project is completed.

In 2018, 41,000 tons of ore were extracted and sold. In 2019, the estimate of total tons of ore in the mine was revised from 310,000 to 397,500. During 2019, 71,000 tons were extracted, of which 51,000 tons were sold.

Required:

1. Compute depletion and depreciation of the mine and the mining facilities and equipment for 2018 and 2019. Marion uses the units-of-production method to determine depreciation on mining facilities and equipment.
2. Compute the book value of the mineral mine, structures, and equipment as of December 31, 2019.

n 2018, the Marion Company purchased land containing a mineral mine for $1,640,000. Additional costs of $568,000 were incurred to develop the mine. Geologists estimated that 600,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $108,000.

To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $210,000. These structures have a useful life of 10 years. The structures cannot be moved after the ore has been removed and will be left at the site. In addition, new equipment costing $90,000 was purchased and installed at the site. Marion does not plan to move the equipment to another site, but estimates that it can be sold at auction for $6,000 after the mining project is completed.

In 2018, 54,000 tons of ore were extracted and sold. In 2019, the estimate of total tons of ore in the mine was revised from 600,000 to 691,000. During 2019, 90,000 tons were extracted.

Required:
1. Compute depletion and depreciation of the mine and the mining facilities and equipment for 2018 and 2019. Marion uses the units-of-production method to determine depreciation on mining facilities and equipment.
2. Compute the book value of the mineral mine, structures, and equipment as of December 31, 2019.

In 2018, the Marion Company purchased land containing a mineral mine for $1,640,000. Additional costs of $568,000 were incurred to develop the mine. Geologists estimated that 600,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $108,000.

To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $210,000. These structures have a useful life of 10 years. The structures cannot be moved after the ore has been removed and will be left at the site. In addition, new equipment costing $90,000 was purchased and installed at the site. Marion does not plan to move the equipment to another site, but estimates that it can be sold at auction for $6,000 after the mining project is completed.

In 2018, 54,000 tons of ore were extracted and sold. In 2019, the estimate of total tons of ore in the mine was revised from 600,000 to 691,000. During 2019, 90,000 tons were extracted.

Required:
1. Compute depletion and depreciation of the mine and the mining facilities and equipment for 2018 and 2019. Marion uses the units-of-production method to determine depreciation on mining facilities and equipment.
2. Compute the book value of the mineral mine, structures, and equipment as of December 31, 2019.

In 2018, the Marion Company purchased land containing a mineral mine for $1,770,000. Additional costs of $590,000 were incurred to develop the mine. Geologists estimated that 250,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $110,000.

To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $127,500. These structures have a useful life of 10 years. The structures cannot be moved after the ore has been removed and will be left at the site. In addition, new equipment costing $102,000 was purchased and installed at the site. Marion does not plan to move the equipment to another site, but estimates that it can be sold at auction for $4,500 after the mining project is completed.

In 2018, 67,000 tons of ore were extracted and sold. In 2019, the estimate of total tons of ore in the mine was revised from 250,000 to 341,500. During 2019, 102,000 tons were extracted.

Required:
1. Compute depletion and depreciation of the mine and the mining facilities and equipment for 2018 and 2019. Marion uses the units-of-production method to determine depreciation on mining facilities and equipment.
2. Compute the book value of the mineral mine, structures, and equipment as of December 31, 2019.
  

Five housing policies are described below, based on examples of measures that have been introduced or proposed in the UK, in response to a chronic shortage of affordable houses in many regions.

Drawing on the module material, write an essay that explains, using the ‘demand-and-supply’ model, the likely impact of each policy on the equilibrium quantity and price of houses, and how this might affect the UK’s affordable housing shortage.

• Policy 2

  Landowners will have to pay a tax for plots of building land for which building permission has been granted but no work has been carried out and the plot remains empty. This is to avoid “land banking” – keeping land undeveloped until it acquires more value due to manufactured shortage.

• Policy 3

  The UK government ‘Help to Buy: Equity Loan’ is a scheme that allows buyers of newly built homes to reduce the deposit needed to 5% while keeping mortgage to 75% thanks to a loan by the Government of the remaining 20% of the cost. If buyers stay in their home for at least five years they won’t have to pay any loan fee on the government scheme. The government has also increased the limit of equity loan for London properties to 40% to reflect current property prices.