3.4 - Cumulative Usage and Costs per Hour
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Practice Questions
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Define economic life in your own words.
💡 Hint: Think about the meaning of cost-effectiveness in operating machinery.
What are the main reasons for costs to increase after economic life?
💡 Hint: Consider factors affecting the machine's usability over time.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the economic life of a machine?
💡 Hint: Consider the term 'economic'.
True or False: Cumulative costs per hour decrease as the usage of a machine increases.
💡 Hint: Think about how expenses are allocated.
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Challenge Problems
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A machine is purchased at ₹45,00,000 with a 10-year lifespan. Calculate its depreciation at the end of the fifth year using the double declining balance method.
💡 Hint: First calculate the depreciated value after the previous year, then apply the formula.
An old excavator has been used for 4,000 hours with increasing maintenance costs each year: year 1 = ₹50,000, year 2 = ₹70,000, year 3 = ₹90,000. Calculate the average maintenance cost per hour at this point.
💡 Hint: Total the costs, then divide by total usage.
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