Question

Consider the following two alternatives: Alternative 1 has a first cost of $485,000, an annual maintenance and operating cost
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Total units produced in one hour for alternative 1 = 5

Total labor required = 2

Wage rate per hour = 25

Total variable cost per hour = 25 * 2 = 50

Per unit cost = 50 / 5 = 10

If X units are produced, then Total variable cost = 10 * X

Last option is correct

Add a comment
Know the answer?
Add Answer to:
Consider the following two alternatives: Alternative 1 has a first cost of $485,000, an annual maintenance and oper...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Consider the following two alternatives: Alternative 1 has a first cost of $325,000, an annual maintenance...

    Consider the following two alternatives: Alternative 1 has a first cost of $325,000, an annual maintenance and operating cost of $20,575, and no salvage value. In addition, it requires two workers at a rate of $25/hour to output 5 units per hour Alternative 2 has an initial cost of $270.000, an annual maintenance and operating cost of $12.300, and a salvage value of $125,000. In order to produce 3 units in an hour, three workers are required a rate of...

  • 8) Determine the capitalized cost of an alternative that has a first cost of $155,000, an...

    8) Determine the capitalized cost of an alternative that has a first cost of $155,000, an annual maintenance cost of $72,000, and a salvage value of $78,000 after its 10-year life. Use an interest rate of 6%. a. a) $187,142 b.c) $1,256,890 c. d) $1,452,367 d. b) 5871,000 QUESTIONS 9) The construction cost of a park is $600,000. Annual maintenance and operating costs are $120,000 per year. At an interest rate of 10% per year, the capitatlized cost of the...

  • Alternative R has a first cost of $82,000, annual M&O costs of $52,000, and a $20,000...

    Alternative R has a first cost of $82,000, annual M&O costs of $52,000, and a $20,000 salvage value after 5 years. Alternative S has a first cost of $175,000 and a $70,000 salvage value after 5 years, but its annual M&O costs are not known. Determine the M&O costs for alternative S that would yield a required incremental rate of return of 24%. The M&O cost for alternative S is $_____ .

  • Alternative R has a first cost of $76,000, annual M&O costs of $54,000, and a $20,000...

    Alternative R has a first cost of $76,000, annual M&O costs of $54,000, and a $20,000 salvage value after 5 years. Alternative S has a first cost of $175,000 and a $61,000 salvage value after 5 years, but its annual M&O costs are not known. Determine the M&O costs for alternative S that would yield a required incremental rate of return of 30%. The M&O cost for alternative S is____ $ .

  • which of the alternatives is the lowest cost based on present worth (PW)? Alternative A has...

    which of the alternatives is the lowest cost based on present worth (PW)? Alternative A has initial cost of $5, daily maintence of 0.25% and salvage value of .75 at the end of two weeks. The interest for Alt A is .25%. Alt B has initial cost of 5.50, weekly maintence of 1.50 an salvage value of 1.00 at the end of three weeks. the interest rate of AltB is 1 3/4% per week.

  • Your boss is considering two different investment alternatives, with the following cash flows: Year   Alternative 1...

    Your boss is considering two different investment alternatives, with the following cash flows: Year   Alternative 1 Alternative 2      0             -$2,000       -$4,000      1                 750       1,200      2                 750       1,200     3                 750       1,200     4                 750       1,200      5             2,000        3,200 The minimum acceptable rate of return is 10% per year. a) What is the annual worth of alternative 1? b) What is the annual worth of alternative 2? c) Given your answers to parts...

  • 6. Analyze the two economic alternatives described below and seleot the annual interest rate of 7%...

    6. Analyze the two economic alternatives described below and seleot the annual interest rate of 7% for both alternatives. All values are in$. best one. Use an Alternative Initial Cost Yearly Operating Expenses Annual Revenues Salvage Value Life (years) 22,000 10,000 2,000 3,000 6,000 10.000 2

  • 1.) Two alternatives are being considered to perform a given job. Both of these alternatives provide...

    1.) Two alternatives are being considered to perform a given job. Both of these alternatives provide equal service. The cost data for each alternative are provided in the tables below: Alternative 1 900,000 100,000 Alternative 2 300,000 30,000 Initial Cost Salvage Value Life, years Annual cost of operation and maintenance Required return 15,000 20,000 20 T20 Use a conventional cost comparison and determine: (a) An equivalent annual cost comparison assuming infinite service need. Which one do you choose? Why? (b)...

  • 3. Compare the alternatives shown below on the basis of their Annual Worth, using an interest...

    3. Compare the alternatives shown below on the basis of their Annual Worth, using an interest rate of 12% per year. Alternative I Alternative II 160.000 25,000 First Cost 15.000 3,000 Annual Operating Cost 1,000,000 4,000 Salvage Value Life. Years

  • 1. Alternative R has a first cost of $58,000, annual M&O costs of $26,000, and a...

    1. Alternative R has a first cost of $58,000, annual M&O costs of $26,000, and a $10,000 salvage value after 5 years. Alternative S has a first cost of $105,000 and a $50,000 salvage value after 5 years, but its annual M&O costs are not known. Determine the M&O costs for alternative S that would yield a required incremental rate of return of 12%.

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT