(46) Rogers plc wishes to use a machine for one month on a new contract. The machine
cost $120,000 six years ago. When purchased it had an estimated life of ten years
and it is being fully depreciated using the straight-line method. It is currently valued
at $39,000 and its estimated value at the end of the year is $15,000. The machine is
under-used and stands idle for perhaps 30% of its time, but it must be retained for
use on similar contracts.
The relevant cost of using the machine on the new contract is:
A Nil
B $250
C $812.50
D $1,000 (2
cost $120,000 six years ago. When purchased it had an estimated life of ten years
and it is being fully depreciated using the straight-line method. It is currently valued
at $39,000 and its estimated value at the end of the year is $15,000. The machine is
under-used and stands idle for perhaps 30% of its time, but it must be retained for
use on similar contracts.
The relevant cost of using the machine on the new contract is:
A Nil
B $250
C $812.50
D $1,000 (2