A company is considering converting a portion of its existing manufacturing space to storage in order to reduce dependence on an external warehouse. The following information reflects the results of a cost-benefit analysis.
What is the total cost of the project?
To find the total cost of the project, we need to add all the costs provided in the cost-benefit analysis: Building construction changes ($15,000), Reduced transportation ($25,000), Manufacturing layout changes ($36,000), and Increased internal storage capacity ($48,000). Adding these amounts together, we get $15,000 + $25,000 + $36,000 + $48,000 which equals $124,000. Therefore, the total cost of the project is $124,000.
It should be 51
I agree, the correct answer is B. "Reduced transportation" and "Increased internal storage capacity" represent benefits or savings and are not included in the total cost calculation. Building construction changes: $15,000 + Manufacturing layout changes: $36,000 = $51,000.
The only 2 costs are nuilding construction changes and manufacturing layout changes there total is 51 K so the correct answer is B.