CMA Final · Strategic Cost Management · Simulation
In a simulation of machine breakdowns for an Ahmedabad plant, the simulated repair times for five breakdowns are 2, 4, 3, 5 and 1 hours. If idle time costs Rs 600 per hour, what is the average simulated cost per breakdown?
Average simulated cost per breakdown is Rs 1,800. Total repair time is 15 hours across five breakdowns, giving an average of 3 hours, and at Rs 600 per idle hour this equals Rs 1,800.
- ARs 1,500
- BRs 1,800Correct
- CRs 2,100
- DRs 3,000
Explanation
Total hours = 2+4+3+5+1 = 15. Average = 15/5 = 3 hours per breakdown. Cost = 3 x 600 = Rs 1,800. Rs 9,000 would be total cost, not average.
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