Assignment 1

1. The fixed and variable costs for the three manufacturing plant sites for a
product are shown in the following table:

Site Fixed cost per year Variable cost per unit

A RM500 RM10

B RM1,000 RM8

C RM1,500 RM6

(a). Write the linear equation for Site A, B and C.

(b). If the production for next year is expected to achieve 500 units, which site
requires the highest total cost?

2. (a) Sketch and describe the life cycle cost concept.

(b) If your company decided to buy a new compactor machine that life 6
years, with relevant examples explain the meaning of investment cost,
operation and maintenance cost and also disposal cost.