A certain masonry dam requires 200,000 cu m of gravel for its construction. The contractor found two possible sources of gravel with the following data: Average distance gravel pit to dam site Gravel cost /cu.m at pit Purchase price of pit Road construction necessary Overbuden to be removed at P4.20 cu.m Source A 3.0 km P800,000.00 P350,000.00 Source B 1.2 km P10.00 80,000 cu.r

A certain masonry dam requires 200,000 cu m of gravel for its construction. The contractor found two possible sources of gravel with the following data: Average distance gravel pit to dam site Gravel cost /cu.m at pit Purchase price of pit Road construction necessary Overbuden to be removed at P4.20 cu.m Source A 3.0 km P800,000.00 P350,000.00 Source B 1.2 km P10.00 80,000 cu.r

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Please give explanation

A certain masonry dam requires 200,000 cu m of gravel for its
construction. The contractor found two possible sources of gravel with
the following data:
Average distance gravel pit to dam site
Gravel cost /cu.m at pit
Purchase price of pit
Road construction necessary
Overbuden to be removed at P4.20 cu.m
Hauling cost per cu.m per km
CreWhich of the two sites will give lesser cost?
Source A
3.0 km
P800,000.00
P350,000.00
P5.00
Source B
1.2 km
P10.00
80,000 cu.m
P5.00
OF PERPET

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