The normal timeframe required for each Activity are as per those stated in the preceding table. The
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Question:
The “normal” timeframe required for each Activity are as per those stated in the preceding table. The client wishes to fast-forward this client engagement process by revising the timeframes to reflect the following.
Total revised time = 6.5
The “Normal” cost allowed for per week = $7,500
By shortening the timeframe in the case of each Activity this measure is predicted to add 15,000 to the “normal weekly cost”.
Required:
Calculate the “Crash Cost ” involved for each Activity and for the overall client engagement process if time frames are to be shortened as in the above table.
i.e. Crash Cost Per Period = [Crash Cost – Normal Cost]/ [Normal Time – Crash Time].
Related Book For
Cost Accounting Foundations and Evolutions
ISBN: 978-1111626822
8th Edition
Authors: Michael R. Kinney, Cecily A. Raiborn
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