Practice Cumulative Obsolescence Cost (2.3) - Downtime Cost Calculation

Practice: Cumulative Obsolescence Cost

Lesson 2.3Downtime Cost Calculation

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8 questions

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6 questions · about 4 min · pass mark 70%. Hints available.
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2 questions · about 1 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
Calculate the downtime cost if the equipment cost is 1200 rupees per hour at 5%.
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Use the formula: Cost * Percentage.
Question 2.
What is the yearly downtime cost if the downtime cost per hour is 30 rupees for 2000 hours?
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Multiply by the total operating hours.
3Question 3.
What is the downtime cost per hour for a machine costing 900 rupees at a 3% downtime rate?
- 27 rupees
- 30 rupees
- 54 rupees
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Remember to calculate the percentage of the equipment cost.
4Question 4.
True or False: The obsolescence cost increases as machinery ages.
- True
- False
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Think about how technology evolves.
Question 5.
If a fleet of machines incurs a total downtime cost of 2,000,000 rupees over five years with varying percentages, calculate the average downtime cost per year.
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Consider all years cumulatively and then average them.
Question 6.
A machine has an obsolescence cost of 0.10 in the fourth year and accumulates costs totaling 520,000 rupees over four years. Determine the total cost due to obsolescence for that year and its contribution to the cumulative costs.
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Factor into your calculations the obsolescence percentage.

4 more questions in this section. Enroll free to practise them all.