Equipment costing P1M is expected to produce 10,000 pieces of pipes during its economic life before being replaced. Annual production of this equipment is 2,500 pipes. The equipment's scrap value is estimated at P50,000. The cost of housing the equipment is P25,000 per year. Costs of power and maintenance per unit are P9.00 and P7.00, respectively. Cost of labor is P35.00 per unit. Use sinking fund method of depreciation with i-12%. What is the variable cost per unit?

Equipment costing P1M is expected to produce 10,000 pieces of pipes during its economic life before being replaced. Annual production of this equipment is 2,500 pipes. The equipment's scrap value is estimated at P50,000. The cost of housing the equipment is P25,000 per year. Costs of power and maintenance per unit are P9.00 and P7.00, respectively. Cost of labor is P35.00 per unit. Use sinking fund method of depreciation with i-12%. What is the variable cost per unit?

Fundamentals Of Construction Estimating

4th Edition

ISBN:9781337399395

Author:Pratt, David J.

Publisher:Pratt, David J.

Chapter9: Pricing Construction Equipment

Section: Chapter Questions

Problem 6RQ

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