If Operators Cost $15 Per Hour in Wages and Fringe

question 64

Multiple Choice

If operators cost $15 per hour in wages and fringe benefits and machine downtime costs $75 per hour in lost production, what is the optimal number of operators for this bank of machines?

• A)1
• B)2
• C)3
• D)4
• E)5

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Definitions:

Straight-Line Depreciation

Straight-line depreciation is a method of allocating the cost of a tangible asset over its useful life evenly.

Gross Depreciable

The total cost or value of an asset that is subject to depreciation over its useful life.

AICPA Survey

A survey conducted by the American Institute of Certified Public Accountants that gathers information on various topics related to accounting practices, trends, and professional issues.

Straight-Line

A method of calculating depreciation or amortization by evenly spreading the cost of an asset over its useful life.