pathfinder - The Institute of Chartered Accountants of Nigeria

PATHFINDERThe average lifetime of the tool is = (1 x 0.1) + (2 x 0.15) + (3 x 0.25) + (4 x 0.3)+ (5 x 0.2) = 3.35 months(i) The average monthly replacement = 10003.35= 298.5079= 299(ii) Individual replacement cost = N4,800 x 299= N1,435,200 per monthor N298.5075 x N4,800= N 1,432,836 per month(b) Monthly failures:Month 1: 0.1 x 1000 = 100Month 2: (0.15 x 1000) + (0.1 x 100) = 160Month 3: (0.25 x 1000) + (0.15 x 100) + (0.1 x 160) = 281Month 4: (0.3 x 1000) + (0.25 x 100) + (0.15 x 160) + (0.1 x 281) = 377Month 5: (0.2 x 1000) + (0.3 x 100) + (0.25 x 160) + (0.15 x 281) + (0.1 x377) = 350To the nearest whole numberMonth 1 = 100; month 2 = 160; month 3 = 281Month 4 = 377; month 5 = 350Cost of group replacementMonth Individual replacement cost(N) Cumulative IndividualReplacement Cost (N)1 4800 x 100 = 480,000 480,0002 4800 x 160 = 768,000 1,248,0003 4800 x 281 = 1,348,800 2,596,8004 4800 x 377 = 1,809,600 4,406,4005 4800 x 350 = 1,680,000 6,086,400Month Cumulative total costAverage monthly cost (N)Inclusive (2,000 x 1000)Group replacement (N)1 2,480,000 2,480,0002 3,248,000 1,624,0003 4,596,800 1,532,266.674 6,406,400 1,601,6005 8,086,400 1,617,280INTERMEDIATE EXAMINATION - NOVEMBER 201137