2. Calculate annual fixed, variable cost and break-even point of a tractor with rotovator:Calculate the estimated annual fixed cost of a 50 hp 4-wheel drive diesel engine tractor and a rotovator with a purchase cost of PhP 900,000 and an estimated life of 20 years. Salvage value after useful life is PhP 300,000. Interest and TIH is assumed to be 2.5% and 1% of purchase cost, respectively. Estimated total hours of operation is 1,000 hrs per year.a. Depreciation (straight line method)b. Interestb. Taxes, insurance and housing (TIH)c. Total annual fixed costs (Depreciation, interest and TIH)d. Fixed cost per hourCalculate the variable costs per hour and per hectare for the above tractor if the estimated labor cost is PhP 500 per hour, diesel fuel is PhP 30 per liter (fuel consumption is 10 liters per hour), lubricant is 15% of fuel cost, accumulated repairs at the end of its 20-year useful life is 30% of its new cost.e. Total variable cost per hour (labor, fuel, lubrication and repairs)If the tractor is covering an average of 1 hectare per hour of operation, determine:f. Total variable cost per hectareIf the custom rate of renting a tractor is PhP 2,800/hectare:g. Calculate the break-even point. Briefly explain this value. 2.Calculate annual fixed, variable cost and break-even point of a tractor withrotovator:Calculate the estimated annual fixed cost of a 50 hp 4-wheel drive diesel engine tractor and a rotovator with apurchase cost of PhP 900,000 and an estimated life of 20 years. Salvage value after useful life is PhP 300,000.Interest and TIH is assumed to be 2.5% and 1% of purchase cost, respectively. Estimated total hours ofoperation is 1,000 hrs per year.а.Depreciation (straight line method)b.Interestb. Taxes, insurance and housing (TIH)Total annual fixed costs (Depreciation, interest and TIH)Fixed cost per hourс.d.Calculate the variable costs per hour and per hectare for the above tractor if the estimated labor cost is PhP500 per hour, diesel fuel is PhP 30 per liter (fuel consumption is 10 liters per hour), lubricant is 15% of fuelcost, accumulated repairs at the end of its 20-year useful life is 30% of its new cost.Total variable cost per hour (labor, fuel, lubrication and repairs)е.If the tractor is covering an average of 1 hectare per hour of operation, determine:f.Total variable cost per hectareIf the custom rate of renting a tractor is PhP 2,800/hectare:Calculate the break-even point. Briefly explain this value.g.

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Calculate annual fixed, variable cost and break-even point of a tractor with rotovator: Calculate the estimated annual fixed cost of a 50 hp 4-wheel drive diesel engine tractor and a rotovator with a purchase cost of PhP 900,000 and an estimated life of 20 years. Salvage value after useful life is PhP 300,000. Interest and TIH is assumed to be 2.5% and 1% of purchase cost, respectively. Estimated total hours of operation is 1,000 hrs per year. a. Depreciation (straight line method) b. Interest b. Taxes, insurance and housing (TIH) c. Total annual fixed costs (Depreciation, interest and TIH) d. Fixed cost per hour Calculate the variable costs per hour and per hectare for the above tractor if the estimated labor cost is PhP 500 per hour, diesel fuel is PhP 30 per liter (fuel consumption is 10 liters per hour), lubricant is 15% of fuel cost, accumulated repairs at the end of its 20-year useful life is 30% of its new cost. e. Total variable cost per hour (labor, fuel, lubrication and repairs) If the tractor is covering an average of 1 hectare per hour of operation, determine: f. Total variable cost per hectare If the custom rate of renting a tractor is PhP 2,800/hectare: g. Calculate the break-even point. Briefly explain this value.

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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2. Calculate annual fixed, variable cost and break-even point of a tractor with rotovator:

Calculate the estimated annual fixed cost of a 50 hp 4-wheel drive diesel engine tractor and a rotovator with a purchase cost of PhP 900,000 and an estimated life of 20 years. Salvage value after useful life is PhP 300,000. Interest and TIH is assumed to be 2.5% and 1% of purchase cost, respectively. Estimated total hours of operation is 1,000 hrs per year.

a. Depreciation (straight line method)

b. Interest

b. Taxes, insurance and housing (TIH)

c. Total annual fixed costs (Depreciation, interest and TIH)

d. Fixed cost per hour

Calculate the variable costs per hour and per hectare for the above tractor if the estimated labor cost is PhP 500 per hour, diesel fuel is PhP 30 per liter (fuel consumption is 10 liters per hour), lubricant is 15% of fuel cost, accumulated repairs at the end of its 20-year useful life is 30% of its new cost.

e. Total variable cost per hour (labor, fuel, lubrication and repairs)

If the tractor is covering an average of 1 hectare per hour of operation, determine:

f. Total variable cost per hectare

If the custom rate of renting a tractor is PhP 2,800/hectare:

g. Calculate the break-even point. Briefly explain this value.

2.
Calculate annual fixed, variable cost and break-even point of a tractor withrotovator:
Calculate the estimated annual fixed cost of a 50 hp 4-wheel drive diesel engine tractor and a rotovator with a
purchase cost of PhP 900,000 and an estimated life of 20 years. Salvage value after useful life is PhP 300,000.
Interest and TIH is assumed to be 2.5% and 1% of purchase cost, respectively. Estimated total hours of
operation is 1,000 hrs per year.
а.
Depreciation (straight line method)
b.
Interest
b. Taxes, insurance and housing (TIH)
Total annual fixed costs (Depreciation, interest and TIH)
Fixed cost per hour
с.
d.
Calculate the variable costs per hour and per hectare for the above tractor if the estimated labor cost is PhP
500 per hour, diesel fuel is PhP 30 per liter (fuel consumption is 10 liters per hour), lubricant is 15% of fuel
cost, accumulated repairs at the end of its 20-year useful life is 30% of its new cost.
Total variable cost per hour (labor, fuel, lubrication and repairs)
е.
If the tractor is covering an average of 1 hectare per hour of operation, determine:
f.
Total variable cost per hectare
If the custom rate of renting a tractor is PhP 2,800/hectare:
Calculate the break-even point. Briefly explain this value.
g.

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