Question 4 (25 marks) Oshana Construction has just s gned a contract with Tangi Enterprises for the construction of a machine. The management accountant constructed the following network diagram for the project FACULTY OF COMMERCE, MANAGEMENT AND LAW 48 B 96 125 A 95 E 128 The duration and variable cost under normal and accelerated circumstances of the various activities are as foliaws Activity Estimated time (hours) Estimated variable implementation Cost slope costs NS Normal Accelerated Normal (NS) Accelerated (NS) B 96 64 224 000 308 000 2 000 95 90 120 000 135 000 ? 0 D 0 B-D 48 32 110 000 126 000 1 000 C-E 128 7 172 000 193 600 1 200 D-E E 125 B5 133 000 193 000 1 500 779 000 955 600 El S RE FE St THI av NE -ON The accelerated duration of activity C Eis uncertain The estimated hours are as follows: Masi optimistic time 98 hours Most likely time 107 hours Most pessimistic time 134 hours Fixed costs are absorbed at a rate of NS1 750 per hour and are not regarded as committed fixed costs. Other direct costs for the project amount to NS 250 000 Marks Required Sub Total tota! 4.1 Calculate the cost slope for activity A-C. 2 2 2 4.2 Calculate the expected duration of the accelerated crash activity C-E 3 5 4.3 Calculate the duration of the various routes and cetermine the critical path 2 7 7 Set out the programme lo be followed in order to reduce total project me in 44 the most cost efficent manner and state the number of hou's for completion of 15 22 the project that will ensure minimum total costs. 4.5 Calculate the accelerated/crash cost of the project 3 25 Total 25 D G AR CH UN - $a Total assignment 2: 85 marks EN SFI Page 16 of 16 Question 4 (25 marks) Oshana Construction has just s gned a contract with Tangi Enterprises for the construction of a machine. The management accountant constructed the following network diagram for the project FACULTY OF COMMERCE, MANAGEMENT AND LAW 48 B 96 125 A 95 E 128 The duration and variable cost under normal and accelerated circumstances of the various activities are as foliaws Activity Estimated time (hours) Estimated variable implementation Cost slope costs NS Normal Accelerated Normal (NS) Accelerated (NS) B 96 64 224 000 308 000 2 000 95 90 120 000 135 000 ? 0 D 0 B-D 48 32 110 000 126 000 1 000 C-E 128 7 172 000 193 600 1 200 D-E E 125 B5 133 000 193 000 1 500 779 000 955 600 El S RE FE St THI av NE -ON The accelerated duration of activity C Eis uncertain The estimated hours are as follows: Masi optimistic time 98 hours Most likely time 107 hours Most pessimistic time 134 hours Fixed costs are absorbed at a rate of NS1 750 per hour and are not regarded as committed fixed costs. Other direct costs for the project amount to NS 250 000 Marks Required Sub Total tota! 4.1 Calculate the cost slope for activity A-C. 2 2 2 4.2 Calculate the expected duration of the accelerated crash activity C-E 3 5 4.3 Calculate the duration of the various routes and cetermine the critical path 2 7 7 Set out the programme lo be followed in order to reduce total project me in 44 the most cost efficent manner and state the number of hou's for completion of 15 22 the project that will ensure minimum total costs. 4.5 Calculate the accelerated/crash cost of the project 3 25 Total 25 D G AR CH UN - $a Total assignment 2: 85 marks EN SFI Page 16 of 16
