Do you have any concerns about using this accounting data to set prices? Hint: Consider the difference between average and marginal cost.   In addition to answering the questions above, provide pricing recommendations for economy vehicles for the next four weeks.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 7EB: Discuss how, as warehouse manager for Vinnies Vinyls, you view the different rate of allocated costs...
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The accounting department at the corporate office has provided you with some historical cost data.   Economy rentals cost $17.10 per day while luxury vehicles cost $25.12 per day. Regardless of vehicle type, a rental contract requires $8.90 for reconditioning. Additional vehicles can be delivered from the regional hub at a cost of $35/vehicle, on top of the costs above. Do you have any concerns about using this accounting data to set prices? Hint: Consider the difference between average and marginal cost.  

In addition to answering the questions above, provide pricing recommendations for economy vehicles for the next four weeks.     

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