Dear John, I am having one confusion. We are looking the ways to maximize the contribution. However, contribution is already given as $6 for standard chairs and $9 for executive chairs. From this information, it is shown that the executive chair is giving max contribution. Why we are struggling to find out max. contribution then. Where i am wrong, please guide. Thanks

We are trying to get the maximum total contribution. The problem is that both the wood and labour are limited and so we need to find the mix of the two types of chair that makes the biggest total contribution without using more of the wood and more of the labour than is available.

If there are more than 2 products then there will only be one limiting factor and therefore you use a key factor or throughput accounting approach as explained in the earlier chapter.

If there is more than 1 limiting factor then it is a linear programming problem and in Paper PM there can only then be 2 products. More than 2 products would require a different technique which is not in the syllabus for ACCA exams.

scorpion716 says

SENSEI John:

this reminds me of ALGABRIC overhead apportionment in Management accounting seems like it

kamran.khan says

Dear John,

I am having one confusion. We are looking the ways to maximize the contribution. However, contribution is already given as $6 for standard chairs and $9 for executive chairs. From this information, it is shown that the executive chair is giving max contribution. Why we are struggling to find out max. contribution then. Where i am wrong, please guide. Thanks

John Moffat says

We are trying to get the maximum total contribution. The problem is that both the wood and labour are limited and so we need to find the mix of the two types of chair that makes the biggest total contribution without using more of the wood and more of the labour than is available.

levanrich says

Good day John.

Does it matter the order of steps two and three when following the steps in doing Linear Programming?

John Moffat says

No, not at all 馃檪

khavipriya12 says

What if there are more than two products in the exam? can you please help me out with this?

John Moffat says

If there are more than 2 products then there will only be one limiting factor and therefore you use a key factor or throughput accounting approach as explained in the earlier chapter.

If there is more than 1 limiting factor then it is a linear programming problem and in Paper PM there can only then be 2 products. More than 2 products would require a different technique which is not in the syllabus for ACCA exams.

akankshatanwar says

sir, we don’t have any lecture on cost volume profit analysis ???

John Moffat says

Of course there are lectures on cost profit analysis!!!!

The lectures cover everything needed to be able to pass the exam well.

Try looking at Chapter 8 of the free lecture notes, and the lectures that go with it!

ahmedqasim5 says

Hi sir, will we be asked to make a graph in computer-based exam ? i am sitting in december 2018. Please answer.

John Moffat says

You cannot be asked to draw any graphs in either the computer based or paper based exams. I make this point in my lecture!!!

You are however tested that you understand the graphs.