Question

The estimated cost per square feet of output is least for:

• A. 75000 sq. ft. output
• B. 100000 sq. ft. output
• C. 125000 sq. ft. output
• D. 150000 sq. ft. output

Answer 1

The correct option is D 150000 sq. ft. output

From the data, till 150000 sq. ft., the electricity cost increased in geometric progression with a common ratio of 1.5. Thereafter it increased in arithmetic progression with common difference of 10000.25.
Total cost =Labour +Material +Electricity + Administration cost
We therefore have the following :
$\begin{array}{cccc}Output& Electrcity& TotalCost& Costpersq.ft.\\ 2500& 3800& 76350& 3.054\\ 5000& 5700& 109200& 2.184\\ 75000& 8550& 141550& 1.8873\\ 100000& 12825& 174825& 1.7483\\ 125000& 19237.5& 208987.5& 1.6719\\ 150000& 28856.25& 245556.25& 1.6370\\ 175000& 38856.5& 288506.5& 1.6486\\ 200000& 48856.75& 336856.75& 1.6843\end{array}$
Thus, the estimated cost per square foot of output is minimum for 150000 square feet output.