In Order to Calculate the Crash Cost Per Unit of Time

question 25

Multiple Choice

In order to calculate the crash cost per unit of time, a project manager has to know

• A)the project's costs, benefits and service life.
• B)the project's normal and crash costs as well as normal and crash time.
• C)the project's equivalent annual costs and crash time.
• D)the project's economic life and its crash costs.
• E)the project's crash and normal time as well as the project's costs and benefits.

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Definitions:

Operating Period

The amount of time a business or a part of it operates within a specific timeframe, typically a fiscal year or quarter.

Variable Costing

An accounting method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of goods sold.

Absorption Costing

A system of accounting that encompasses the full range of manufacturing costs—direct materials, direct labor, and overheads both variable and fixed, within the cost framework of a product.

Break-even Sales

The amount of revenue required to cover total fixed and variable costs, resulting in a net profit of zero.