The following information is made available from the costing records of a factor: (1) The original cost of the machine $1,00,000 Estimated life 10 years Residual value $5,000 Factory operates for 48 hours per week – 52 weeks in a year Allow 15% towards machine maintenance down-time. 5% may be allowed as setting up time. (11) Electricity used by the machine is 10 units per hour at a cost of 50 cents per unit.

The following information is made available from the costing records of a factor: (1) The original cost of the machine $1,00,000 Estimated life 10 years Residual value $5,000 Factory operates for 48 hours per week – 52 weeks in a year Allow 15% towards machine maintenance down-time. 5% may be allowed as setting up time. (11) Electricity used by the machine is 10 units per hour at a cost of 50 cents per unit.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 22E: The activity of moving materials uses four forklifts, each leased for 18,000 per year. A forklift is...

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