Question 11
A company manufactures headphones.
70% of production costs are prime costs. Production overhead costs are driven by the number of headphones produced.
Which costing system would be most appropriate for product profitablilty analysis?
Question 12
A company manufactures two products and has two production constraints.
When the graphical approach to linear programming is used, the axes of the graph will show:
Question 13
RST is preparing a quotation, on a relevant cost basis, for a special order.
Which TWO of the following are relevant costs that should be included in the quotation?
Question 14
JRL manufactures two products from different combinations of the same resources. Unit selling prices and unit cost details for each product are as follows:
* Refer to your answer in the previous question.
The optimal solution to 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.
Select ALL the true statements.
Question 15
Forecast sales demand of product W next period is 6,800 units. Product W requires 5 kg of material Y, seven hours of skilled labour and six hours of semi-skilled labour.
Availability of resources for next period is forecast as follows:
No inventories are held.
What is the principal budget factor for next period?