An industrial company has (20) machines, and every malfunction that costs the company 180 dinars to be repaired includes repair costs and maintenance services. In addition to (0.10) of the working time for each working day, noting that each delay for one working day costs the company (8000) dinars, and the company responsible for the preventive maintenance program provided it after the daily working hours at a cost of (300) dinars per machine, and thus loss can be avoided. The working day, and the holidays possibilities have been estimated as shown in the following table:   Required: 1- Calculating the cost of repairing the malfunction during work (remedial maintenance)                 2- Calculating the cost of a preventive maintenance policy or program if it is followed every month, and if it is followed every three months. 3- Determine what is best for the company? Do you choose a curative maintenance policy or preventive maintenance? By the body in charge of this?               Possibility of malfunction   The period between one holiday and another (months)   0.10 1 0.20 2 0.30 3 0.40 4

Principles of Cost Accounting
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An industrial company has (20) machines, and every malfunction that costs the company 180 dinars to be repaired includes repair costs and maintenance services. In addition to (0.10) of the working time for each working day, noting that each delay for one working day costs the company (8000) dinars, and the company responsible for the preventive maintenance program provided it after the daily working hours at a cost of (300) dinars per machine, and thus loss can be avoided. The working day, and the holidays possibilities have been estimated as shown in the following table:

  Required: 1- Calculating the cost of repairing the malfunction during work (remedial maintenance)

                2- Calculating the cost of a preventive maintenance policy or program if it is followed every month, and if it is followed every three months.


3- Determine what is best for the company? Do you choose a curative maintenance policy or preventive maintenance? By the body in charge of this?

 

 

 

 

 

 

 

Possibility of malfunction

 

The period between one holiday and another (months)

 

0.10

1

0.20

2

0.30

3

0.40

4

 

Expert Solution
Step 1

Each delay for one working day costs the company 8000 dinars

0.10 of the working time for each working day in repairs

So, cost of repair each working day given the possibility of breakdown

=0.1×0.1×8000 Dinars+0.2×16000 Dinars+0.3×24000 Dinars+0.4×32000 Dinars=0.1×800+3200+7200+12800=2400 Dinars

cost of repairing the malfunction during work

==2400+180×20=6000 Dinars

 

 

 

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