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Sir Please do let me the know the answer for this question.
A taxi company operate taxi for a maximum of 1600 hours per year. It generates revenue of $50 per hour and has variable running cost of $30 per hour. The fixed costs are charged at $10 per hour.
THE COMPANY IS EVALUATING TWO OPTIONS FOR THE TAXI MAINTENANCE.REMEDIAL MAINTENANCE : This is caused by intermittent breakdowns and will, on average, mean the taxi is unavailable and require maintenance for 18 hours per year. Remedial Maintenance costs are $55 per hour.
PREVENTATIVE MAINTENANCE : This will entail the taxi undergoing three intensive services over the year, each of which will take five hours. Preventative maintenance costs are $75 per hour.
BOTH TYPE OF MAINTENANCE WOULD TAKE PLACE IN THE 1600 AVAILABLE OPERATING HOURS PER YEAR.
TASK 1 : THE COMPANY WISHES TO CHOOSE THE MOST ECONOMIC METHOD OF MAINTAINING A TAXI.CALCULATE THE NET ANNUAL RELEVANT COST PER TAXI OF THE TWO OPTIONS WHICH WILL ALLOW THEM TO MAKE THE DECISION
OPTION 1 : REMEDIAL MAINTENANCE $______________
OPTION 2 : PREVENTATIVE MAINTENANCE $_______________TASK 2:
WHICH OF THE FOLLOWING ARE ADVANTAGES OF REMEDIAL MAINTENANCE ?
1) THE ANNUAL COST OF MAINTENANCE CAN BE ACCURATELY FORECAST
2) THE SERVICE PROVIDED TO CUSTOMERS WILL BE MORE RELIABLEOPTIONS:
BOTH 1 AND 2
1 ONLY
2 ONLY
NEITHER 1 OR 2TASK 3 :
VALUE ANALYSIS IS A FORM OF ____________ BY WHICH PHYSICAL AND ___________
PRODUCT OR SERVICE ARE REVIEWED WITH THE AIM OF REDUCING ITS ____________ OF THE CONSUMER.There is no point in typing out a full question and expecting to be provided with a full answer.
You must have an answer in the same book in which you found the question, so ask about whatever it is in the answer that you are not clear about and then I will explain.
I did not found the answer there.
This is about relevant costing.
The first question is that the revenue is $50 per hour and 30$ Variable cost per hour and 10$ Fixed cost per hour.
So what will the opportunity cost for those hours in which the taxi will be in maintenance ? PROFIT $10 OR CONTRIBUTION $20 ?And second one this theory question .
WHICH OF THE FOLLOWING ARE ADVANTAGES OF REMEDIAL MAINTENANCE ?
1) THE ANNUAL COST OF MAINTENANCE CAN BE ACCURATELY FORECAST
2) THE SERVICE PROVIDED TO CUSTOMERS WILL BE MORE RELIABLEOPTIONS:
BOTH 1 AND 2
1 ONLY
2 ONLY
NEITHER 1 OR 2Again, we do not provide full answers to full questions. We provide help for anything you are not clear about in our lectures and anything you are not clear about in an answer in your Revision Kit.
It is pointless attempting questions for which you do not have an answer. You should be using a Revision Kit from one of the ACCA Approved Publishers. It has answers and workings.
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