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In q32 b) you should choose the optimal combination from 5 projects that combined give the highest NPV.
I also did not take into consideration fixed costs in q 32 and I used the tax -allowable depreciation starting with the second year. The optimal combination for investment I got to be ABCD with the highest NPV.
I had the same results as Feroz in Q 5: mix variance 6554 A and 48144 F.
I hope it is the right answer.Daniel, I did exactly as you say to calculate the contribution. I was affraid when I was reading diffrent versions here, more complicated.
1. Long, long calculations, I hope I managed with those batches, they were tricky.
2. Linear programing: x= 20.000 y=66.000
3. only a), transfer price was difficult and I didn’t have enough time to think more about it.
4. With EV of profit I choose the price 30, with maximin, 35.
5.Mix variance, I compared Standard mix of actual volume with actual volume and using contribution to give them a monetary value. Total mix variance : 6554 – adverse.
Quantity variance, I compared Standard mix of actual volume with standard mix standard volume. Total quantity variance : 48.144 – favorable.I managed to answer all questions, except the third one, which I find it the most dificult. I did only calculations for that and poor answer in commenting.
Yes, it was a fair paper.