dear friend,
can anyone pls solve the problem from subject Management accounting in Group IV(paper 15)
| A machine owner finds from his past experience that cost per year of maintenance of a machine whose | |||||||||
| purchase price is Rs.6,000/- are as given below: | |||||||||
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Maintenance Cost (Rs.): | 1000 | 1,200 | 1,400 | 1,800 | 2,300 | 2,800 | 3,400 | 4,000 | |
| Resale price (Rs.) | 3000 | 1,500 | 750 | 375 | 200 | 200 | 200 | 200 | |
| At what age is replacement due? | |||||||||
| Year | cost-resale price | maintenance cost | cumulative maintenance cst | total cost(2+4) | average cost |
| (1) | (2) | (3) | (4) | (5) | (6) |
| 1 | 3000 | 1000 | 1000 | 4000 | 4000 |
| 2 | 4500 | 1200 | 2200 | 6700 | 3350 |
| 3 | 5250 | 1400 | 3600 | 8850 | 2950 |
| 4 | 5625 | 1800 | 5400 | 11025 | 2756.25 |
| 5 | 588 | 2300 | 7700 | 13500 | 2700 |
| 6 | 5800 | 2800 | 10500 | 6300 | 2716.67 |
| 7 | 5800 | 3400 | 13900 | 19700 | 2814.29 |
| 8 | 5800 | 4000 | 17900 | 23700 | 2962.5 |
optimal replacement period is at the end of 5th of ryear
age of replacement=5years
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