A construction company has purchased a motor for P20,000 and a generator for P8,000 to produce its own energy to meet electricity demands in the construction site. The assembly of the motor- generator set-up costs P5,000. The service will operate for 10 years, 1,600 hours per year. The maintenance cost is P1,200 per year, and the cost to operate is P5 per hour for fuel and other costs. The salvage value at the end of ten years is equal to P1,000. depreciation is considered as one of the operating costs, Use straight line depreciation, then calculate and determine the annual cost of operation.

A construction company has purchased a motor for P20,000 and a generator for P8,000 to produce its own energy to meet electricity demands in the construction site. The assembly of the motor- generator set-up costs P5,000. The service will operate for 10 years, 1,600 hours per year. The maintenance cost is P1,200 per year, and the cost to operate is P5 per hour for fuel and other costs. The salvage value at the end of ten years is equal to P1,000. depreciation is considered as one of the operating costs, Use straight line depreciation, then calculate and determine the annual cost of operation.

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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