Question

No1 (a) Describe life cycle cost concept. State the factors that demonstrate the potential for achieving life cycle cost saving greatest in the acquisition phase. (b) Locate some of the noteworthy characteristics of principles of economics, Select some (03 MARKS) of the principles of Engineering Economics and apply them in a real business situation (04 MARKS) (0) Apply the concept of cost estimation to the following situation Various expenditures in manufacturing of an offset printing machine are as given below: (08 MARKS) (0) Material consumed. Rs. 55,000 (ii) Indirect Factory Wages. Rs. 8,000 Director's Fee Rs. 3,000 (iv) Advertising Rs. 10,000 Net profit Rs. 12,500 (vi) Depreciation in sales dept. car Rs. 1.100 (vii) Printing & Stationary Rs.250 (viii) Depreciation in Plant. Rs.4500 (ix) Direct Wages Rs.65,000 Factory Rent Rs. 6.000 (xi) Telephone & Postal Charges. Rs. 150 (xii) Office Salaries Rs. 2100 (xiii) Gas & Electricity Rs. 500 (xiv) Office Rent Rs. 500 (xv) Show Room Rent Rs. 1,500 (xvi) Salesman Commission Rs. 2,650 (xvii) Sales Dept Car Expenses Rs. 1.500 Find Out (a) Direct Cost (b) Works or Factory Cost (c) Total cost of Production (d) Cost of Sales (el Selling Price