Lifter Company Uses Forklifts to Move Materials from the Store

question 84

Multiple Choice

Lifter Company uses forklifts to move materials from the store area to the production floor. The company has four forklifts, which are fully used 16 hours per day (making five moves per hour) . The company works 300 days per year, running two 8-hour shifts per day. The forklift operators work 2,000 hours per year and are paid an annual salary of $45,000.
According to a recent study, each forklift uses 0.25 litres of fuel per move. The cost of fuel is $2.00 per litre.
-Refer to the Figure.Suppose that the actual moves made are 80% of the forklifts' capacity.What is the after-the-fact budgeted fuel cost?

• A)$9,600
• B)$38,400
• C)$48,000
• D)$153,600

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Definitions:

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to a stable market condition.

Marginal Cost

The expenditure required to produce an additional single unit of a product or service.

Total Revenue

The total amount of money generated by a business from selling its goods or services, calculated as the unit price multiplied by the quantity sold.

Competitive Industry

An industry where numerous producers are in competition with one another, leading to a situation where no single firm has significant market power, and prices are determined by overall supply and demand.