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Free ACCA & CIMA online courses from OpenTuition
Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams
Free ACCA & CIMA online courses from OpenTuition
Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams
Hello sir,
Are there any workings for question 4?
Kind regards
A has unlimited production capacity and therefore the minimum TP is the marginal cost of $30.
B has net marginal revenue of 70 – 20 = 50, and therefore that is the maximum TP.
Have you watched the free lectures on this?
Sir In Question No 3,
We are giving up the Contribution of X ($4 per hour + 100 SP) because the business needs Y. So we only Produce Y & stop producing X??
In question 3, I didn’t quite understand why the marginal cost is 100 and not 80?
As you are looking to transfer product Y to another department, therefore you would use the marginal cost of product Y, not X.
So Y is being transferred to the other division, That’s why the Minimum Price should be > 100 & the Greater contribution lost is $4 per hour so $40( 10×4) becomes our opportunity cost !! Thanks man !! Clear now !!
In question 2, why is the buying cost of $350 must be subtracted with marginal cost of $240?
Because if Q buys from outside they will pay 350 and P will no longer be making it which will save costs of 240. So it will be costing the company an extra 110.