An investment of P3M can be made in a business that will produce uniform annual revenue of P1.2M for five years and then have a salvage value of 10% of the investment. Operations and maintenance will be P100, 000 per year. Taxes and insurance will be 5% of the first cost per year. The investor expects to earn not less than 20% before income taxes. Is this a good investment? Use the annual cost method.

Q: Define cost behaviour.

A: High-Low Method: The high-low method is the method by which the variable component and the fixed…

Q: Define product cost with an example?

A: Cost: Cost refers to the expenses incurred by the business to earn revenue from sales, in other…

Q: Explain the term economic order quantity.

A:

Q: What Are features and differences between cost accounting and management accounting?

A: Cost accounting: Cost accounting refers to the branch of accounting, that records and analyses the…

Q: types of cost drivers with example?

A: Explain the types of Cost Drivers.

Q: Define Horizontal analysis

A:

Q: Define value engineering. How is it used to control costs?

A: Value engineering also called value analysis refers to the process of increasing quality of the…

Q: What are cost-control processes?

A: In every business, cost is the most relevant and sensitive data that every management wants to…

Q: Discuss cost-benefit analysis and financial analysis tools

A: Answer: Cost-benefit analysis: It is nothing but a process of decision making that balances the…

Q: Explain the relationship between engineering economic analysis and engineering design. How does…

A: Solution: Relationship Between Engineering Economic Analysis And Engineering Design The relationship…

Q: What is the Economic Ordering Quantity?

A: Economic ordering quantity (EOQ): Economic ordering quantity (EOQ) is the perfect order quantity a…

Q: How cost accounting covers the problem of price assessment

A: Cost Accounting Cost accounting is also a form of group action accounting that aims to capture a…

Q: Why do engineers need cost data?

A: The question is based on the concept of cost in engineering projects.

Q: Distinguish between a cost center, a profit center, and an investment center

A: Definition: Responsibility center: A department or unit of a corporation where the management…

Q: Differentiate between physical units and equivalent units

A:

Q: ss

A: Behavioral theory of management : Behavioral management philosophy is based on the idea that…

Q: What is Cost account payable

A: All variable costs are reduced from sales revenue to get at a contribution margin, from which all…

Q: COSTING METHOD. 1. What is average cost method? 2. What is FIFO cost method?

A: Solution: 1.   Average cost method: Average cost method is also known as weighted average method.…

Q: Define the term Cost approaches.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: What two assumptions are frequently made when estimating a cost function?

A: Cost Function:Cost function represents the basic change that occurs in the total cost due to the…

Q: Question 2: Explain market culture and hierarchy culture

A: Market culture: Market culture is a technique where primary focus is on competition and Growth.…

Q: What is cost accounting?

A: What is cost accounting?