You Have Been Asked What the Estimated Power Cost Will

question 54

Multiple Choice

You have been asked what the estimated power cost will be per month (30 days) for the new equipment room you are designing. The power load you have calculated to be an average of 1850 watts per hour. What is the monthly cost assuming the cost of electricity is 7.5 cents (U.S.) per kilowatt hour?

• A) $44.40
• B) $55.50
• C) $99.90
• D) $122.80
• E) $140.10

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Definitions:

Total Cost Concept

An approach in accounting that considers all costs related to the production of a product, including direct, indirect, fixed, and variable costs.

Rate of Return

The Rate of Return (RoR) is a financial metric used to measure the profitability of an investment, representing the percentage of profit or loss relative to the investment's original cost.

Variable Direct Materials Cost

Refers to the fluctuating cost of raw materials that directly goes into producing a product, changing as the volume of production varies.

Contribution Margin

The amount by which the sale of a product exceeds its variable costs, contributing to covering fixed costs and generating profit.