The performance of a production manager is assessed on efficient use of materials during the production process.
Actual data and data from the fixed budget for Month 4 are as follows:
What figures should be compared in order to assess the production manager's performance for Month 4?
A bakery manager is deciding how many batches of birthday cakes to decorate each day.
Demand for the birthday cakes varies from 12 to 15 batches per day. Each batch decorated and sold earns a contribution of $40 but each batch unsold leads to loss of contribution of $15.
The payoff table below shows the total $ contribution from each of the possibilities:
Based on expected values, the number of batches of birthday cakes the bakery manager should decorate each day is:
JRL manufactures two products from different combinations of the same resources. Unit selling prices and unit cost details for each product are as follows:
The optimal solution in the previous question shows that the shadow prices of skilled labour and direct material A are as follows:
Skilled labour $ Nil
Direct material A $11.70
Explain the relevance of these values to the management of JRL.
What is the additional contribution that can be earned?
PQR is preparing the production budget for one of its products, the DX1, for the forthcoming year.
The following information is available:
How many units of the DX1 will need to be produced in the forthcoming year?
You are a management accounting working for a car manufacturer. The company is publicly listed and has been around for many years.
The company produces 2 products. Car 1 and Car 2. Car 1 sells for £20,000 and Car 2 for £27,000.
Car 1 can be upgraded post production to the 1ZC model for £5,000 and Car 2 to the 2ZC model for £3,500.
Post production upgrade the 1ZC sells for £25,500 and the 2ZCfor £30,000.
The company sources all of its supplies for the same supplier and has access to a large workforce. As a result there are no bottlenecks or limiting factors to production.
Based on the information above the company should...
Explain why sensitivity analysis is useful when dealing with uncertainty in project
appraisal.
Select all the true statements.
The following information is available regarding a company's two products for last period.
What is the favourable sales quantity profit variance for last period?
Give your answer to the nearest whole $.
XY manufactures a range of products and uses an activity based costing system.
Budgeted production of Product B is 7,500 units.
Overheads have been identified by activity and related to appropriate cost drivers.
Product B is produced in batches of 250 units. Machines have to be reset after every batch and quality inspections are carried out on every third batch.
What is the total overhead cost per unit of Product B?
Give your answer to two decimal places.
Which of the following would cause an adverse fixed overhead volume variance?
EFG is a small business making raspberry jam to sell at local markets. It has recently been approached by a major supermarket to produce a special order for the supply of lemon curd.
Two of the ingredients required are sugar and preservatives, both of which are in inventory.
The sugar has a historic cost of $4 per kg and a replacement cost of $5. It is in regular use for the production of the raspberry jam.
The factory has switched to organic processes and the preservatives are no longer required.
The historic cost of the preservatives was $3 per kg and the replacement cost is $2.50 per kg.
The preservatives can be re-sold to a local competitor for $1 per kg if they are not used in this order.
Which TWO of the following should be included in determining the relevant cost of the special order?
