A Project Has the Activity Duration and Cost Information Indicated

question 69

Multiple Choice

A project has the activity duration and cost information indicated in the table where all times are in weeks.What is the total cost for completing this project as quickly as possible? $\begin{array}{|l|l|l|l|l|l|}\hline \text { Activity } & \text { Predecessor } & \begin{array}{l}\text { Normal } \\\text { Time }\end{array} & \begin{array}{l}\text { Normal } \\\text { Cost }\end{array} & \text { Crash Time } & \text { Crash Cost } \\\hline \text { A } &--& 8 & \$ 12,000 & 5 & \$ 22,000 \\\hline \mathrm{B} & \text { A } & 12 & \$ 18,000 & 9 & \$ 32,000 \\\hline \text { C } & \text { A } & 15 & \$ 22,000 & 9 & \$ 62,000 \\\hline \mathrm{D} & \mathrm{B} & 3 & \$ 9,000 & 2& \$ 18,000 \\\hline \mathbf{E} & \text { C } & 9 & \$ 15,000 & 5 & \$ 35,000 \\\hline \mathrm{F} & \mathrm{E} & 7 & \$ 5,000 & 5 & \$ 8,000 \\\hline \mathrm{G} & \mathrm{D} & 8 & \$ 13,000 & 6 & \$ 23,000 \\\hline \mathrm{H} & \mathrm{A} & 12 & \$ 20,000 & 8 & \$ 32,000 \\\hline \mathrm{J} & \mathrm{H} & 6 & \$ 45,000 & 4 & \$ 56,000 \\\hline\end{array}$

• A)$244,000
• B)$255,600
• C)$258,333
• D)$262,000

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Definitions:

Variable Cost

Costs that change in proportion to the level of activity or volume of production, such as raw materials or sales commissions.

Prime Cost

The combined costs of direct materials and direct labor that are directly involved in the manufacturing of a product.

Direct Labor

The wages and salaries of employees who are directly involved in the production of goods or services.

Manufacturing Overhead

All manufacturing costs that are not directly associated with the production of goods, such as utilities, rent, and salaries for managers.