Question

Use the given data to crash one-time unit per move using the least cost method. Assume that the indirect costs are initially $200 at the start of the project and are reduced by $23 for each time unit. What is the total cost reduction achieved by crashing the project by one-time unit, and what is the resulting total indirect cost for the project?

a. $177 reduction; $23 total indirect cost

b. $200 reduction; $0 total indirect cost

c. $23 reduction; $177 total indirect cost

d. $0 reduction; $200 total indirect cost

Answer 1

The total cost reduction achieved by crashing the project by one-time unit is $23, and the resulting total indirect cost for the project is $177.

Step-by-step explanation:

To determine the total cost reduction achieved by crashing the project by one-time unit, we need to consider the reduction in indirect costs. According to the given information, the indirect costs are initially $200 and are reduced by $23 for each time unit. So, the total cost reduction achieved by crashing one-time unit would be $23.

As for the resulting total indirect cost for the project, it would be the difference between the initial indirect costs and the reduction achieved by crashing one-time unit. Therefore, the resulting total indirect cost for the project would be $200 - $23 = $177.