3.4. Repair Cost Calculation

Try these first

1. 1.

   What are ownership and operating costs?

   Hint

   Think about the difference between purchasing and operating expenses.

2. 2.

   Define depreciation.

   Hint

   Consider how the value of a car drops as it ages.

3. 3.

   What are the two main cost categories in repair cost calculation?

   • A) Ownership and Operating
   • B) Material and Labor
   • C) Fixed and Variable

   Hint

   Consider the nature of expenses.

4. 4.

   True or False: Salvage value is always considered in depreciation calculations.

   • True
   • False

   Hint

   Think about different calculation methods.

5. 5.

   If a machine has an initial cost of ₹4 crores and a salvage value of 10% with a useful life of 15 years, what is the annual depreciation?

   Hint

   Start by calculating the actual depreciable cost.

6. 6.

   Given the operating cost includes fuel, wage, and maintenance amount to ₹8,000 per hour. If the truck operates for 1,800 hours a year, what's the total operating cost?

   Hint

   Break it down to simple multiplication to find the total.