QUESTION 4 Tires fuel and lubricants are examples of expense

QUESTION 4 Tires, fuel, and lubricants are examples of expenses associated with which of the following O Operating Cost O ownership cost overhead cost O Unit cost QUESTION 5 Salvage value, property taxes, insurance, storage fees and tax savings from depreciation are the most significant cash flows affecting: o a. Operating cost b. Ownership cost c. Overhead cost d, Capital cost

Solution

#4 . Tires, fuels and lubricants are consumables for automobiles. These expenses come while running and servicing of the vehicles. Thus, their expenses are associated with operating cost.

Ans: (a)

#5. Salvage value, property taxes, insurance, storage fees and tax savings from depreciation are costs that are not directly associated with running or in owbership. Thus, they come under overhead cost.

Ans: (c).