Buy and sell capacity in MikesBikes

Buying and Selling Plant Capacity in MikesBikes Advanced

Buying Plant Capacity

Plant can be purchased or sold each period in multiples of 10 SCUs. Each 10 SCU of plant costs $1,600 to buy and any new plant takes one period to be commissioned and become productive.

Selling Plant Capacity

Plant is depreciated in the annual accounts using the diminishing value method, at a rate of 20% per annum. It can also be sold at any time. However the selling price will depend upon the age of the plant, how well it has been maintained, and how much investment has been made into quality systems and setup time reduction upgrades.

If there is any difference between the actual selling price of plant and its book value then that will be reported in the accounts as either a loss or gain on sale. When plant is sold, you lose the use of that plant immediately.