Subtopic: Cost analysis of implements and tractors
Question Statement:
Fixed cost per year and variable cost per hour of a tractor were estimated based on its annual usage of 800 h. The total cost of operation was found to be Rs. 540 per hour. It was later re-estimated and found that total cost of operation would be Rs. 510 per hour, if the annual hours of use were increased to 1000 h. Considering all the components of annual usage cost to be the same, the variable cost in Rs. per hour would be ______. [answer in integer]
Official Answer Key:
385.0 to 395.0
Step-by-Step Solution & Explanation
Let F = fixed annual cost, V = variable cost/hour. Total annual cost = F + (hours × V). At 800 h: F + 800V = 540×800 = 432,000. At 1000 h: F + 1000V = 510×1000 = 510,000. Subtracting: 200V = 78,000 → V = Rs. 390/h.
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