Lifter Company uses forklifts to move materials from the store area to the production floor. The company has four forklifts, which are fully used 16 hours per day (making five moves per hour). The company works 300 days per year, running two 8-hour shifts per day. The forklift operators work 2,000 hours per year and are paid an annual salary of $45,000.
According to a recent study, each forklift uses 0.25 litres of fuel per move. The cost of fuel is $2.00 per litre.
-Refer to the Figure.Suppose that the actual moves made are 80% of the forklifts' capacity.What is the after-the-fact budgeted fuel cost?
A)$9,600
B)$38,400
C)$48,000
D)$153,600

Question

Quizplus · Accepted Answer

The forklifts make 5 moves per hour, 16 hours per day, for 300 days, totaling 24,000 moves per year (5 moves/hour * 16 hours/day * 300 days). At 80% capacity, the actual moves are 19,200 (24,000 * 0.8). Each move uses 0.25 litres of fuel, so total fuel used is 4,800 litres (19,200 moves * 0.25 litres/move). At $2.00 per litre, the fuel cost is $9,600 (4,800 litres * $2.00/litre).

Lifter Company Uses Forklifts to Move Materials from the Store