For a construction job, a contractor can haul rock by means of an ordinary 10 cubic yard dump truck, or he can use a combination rig where a 10 cubic yard truck also pulls an 8 cubic yard trailer. When this combination is used, the trailer slides into the empty dump truck body for the return trip. The total equivalent operating cost, including the driver, amortization of capital, interest on the investment, fuel, and maintenance is P625/hour for the dump truck and P875/hour for the tandem rig. For the required 10-mile haul, the loading and unloading, hauling, and return times are as follows; Time, minutes Conventional Double Rig Loading 3 5 Unloading 4 10 Hauling 24 28 Return 20 24 How much is the difference in cost per unit volume between the two alternatives?

For a construction job, a contractor can haul rock by means of an ordinary 10 cubic yard dump truck, or he can use a combination rig where a 10 cubic yard truck also pulls an 8 cubic yard trailer. When this combination is used, the trailer slides into the empty dump truck body for the return trip. The total equivalent operating cost, including the driver, amortization of capital, interest on the investment, fuel, and maintenance is P625/hour for the dump truck and P875/hour for the tandem rig. For the required 10-mile haul, the loading and unloading, hauling, and return times are as follows; Time, minutes Conventional Double Rig Loading 3 5 Unloading 4 10 Hauling 24 28 Return 20 24 How much is the difference in cost per unit volume between the two alternatives?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 31P: Jonfran Company manufactures three different models of paper shredders including the waste...

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