- This topic has 7 replies, 2 voices, and was last updated 7 years ago by
.
- Posts
Hello Tutor, I have some of the questions from the Bpp mock exam 3 Dec 2016, which the answers not providing the working and I doubt how to get the answer, hope Tutor will lend me a hand for the following question, many appreciated.
Section A
Q3
A manufacturing company decides which of three mutually exclusive products to make in its factory on the basis of maximising the company’s throughtput accounting ratio.
Current data for the three products is shown in the following table:
Selling price per unit :
Product X -$60
Product Y -$40
Product Z -$20Direct material cost per unit:
Product X -$40
Product Y -$10
Product Z -$16Machine hour per unit :
X- 10
Y-20
Z-2.5Total factory costs (excluding direct materials)are $150,000.The company cannot make enough of any of the products to satisfy external demand entirely as machine hours are restricted.
Which of the following actions would improve the company existing throughput accounting ratio
A. Increase the selling price of Product Z by 10%
B. Increase the selling price of Product Y by 10%
C.Reduce the material cost of Product Z by 5%
D.Reduce the material cost of Product Y by 5%
Answer is A.Q19
Hare Events is also considering including a 10km race during the running festival.It expects the race will have an entry fee of $20 per competitor and variable costs of $8 per competitior.Fixed costs associated with this race will be $48000
IF the selling price per competitor ,the variable cost per competitor and the total fixed costs for this 10km race all increase by 10%,which of the following statements will be true?
A. Breakeven volume will increase by 10% and breakeven revenue will increase by 10%
B.Breakeven volume will remain unchanged but breakeven revenue will increase by 10%
C. Breakeven volume will decrease by 10% but breakeven revenue will remain unchanged
D.Breakeven volume and breakeven revenue will both remain the sameAnswer is B.
Section B Q26
Which of the three processes,if any ,is a bottleneck activity?
A. Weighing
B.Mixing
C .Baking
D .There is no bottleneck
Answer is BProcess – Minutes available
Weighing – 240
Mixing -180
Baking – 1440Three types of cake: Brownies, Muffins, and Cupcakes
batch size (B : M :C) – 40 , 30 ,20
Selling price ($ per unit)- 1.50 , 1.40 , 2.00
Material cost – 0.25 ,0.15 ,0.25Maximum demand – 140 , 90 ,100
Weighing minutes per batch – 15 , 15, 20
Mixing minutes per batch – 20 , 16 ,12
Baking minutes per batch – 120 ,110 ,120Sweet Treat Bakery uses throughput accounting
Q29
On friday,due to a local food festival at the weeked ,Sweet Treats Bakery is considering incresing its production of cupcakes.These cupcakes can be sold at the festival at the existing selling price.
The company has unlimited capacity for weighing and mixing on Friday but its existing three ovens are already fully utilised. Therefore in order to supply cupcakes to the festival,Sweet Treats Bakery will need to hire another identical oven at a cost of $45 for the day.How much will profit increase by if the company hires the new oven and produces as many cupcakes as possible?
A.$55
B.$140.00
C.$95
D$.31
answer is CPlease do not type out complete questions like this – it is breaking BPP’s copyright. I have the BPP Revision Kit and so all you need to is give the number of the question and the page number.
Q3 We don’t know the cost per factory hour, but that is not needed because the product with the highest throughput return per hour will automatically give the highest TPAR.
The current throughput returns per hour are:
X: (60 – 40)/10 = $2; Y: (40 – 10)/20 = $1.50; Z: (20 – 16)/2.5 = $1.60
So at the moment, X is best.If the selling price of Z increases by 10%, then its throughput return will be (22 – 16)/2.5 = $2.4. This is more than the $2 they are currently getting and so they will with to Z and things will improve. (If you check the other 3 options, then you will find that the best remains X at $2 per hour.)
Q19: The CS ratio is currently (20-8)/20 = 0.6. Therefore the current breakeven revenue is 48,000/0.6 = $80,000, and the current breakeven volume is $80,000/$20 = 4,000.
If everything increases by 10%, then the new CS ratio is (22-8.8)/22 = 0.60.
Therefore the new breakeven revenue = 52,800/0.60 = $88,000, and the new breakeven volume is $88,000/22 = 4,000.Have you watched my free lectures on these topics. The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
B26: To fulfil maximum demand, they will need to make 4 batches of B, 3 batches of M, and 5 batches of C.
The total time needed in weighing is (4 x 15) + (3 x 15) + (5 x 20) = 205 minutes. There are 240 minutes available, and so weighing is not a bottleneck.
If you do the same for Mixing and Baking, you will find that it is only Mixing where there is not enough time available.Currently Baking has 1,440 minutes available. This is for 3 ovens, and so 1 more oven will give them 1,440/3 = 480 more minutes.
Therefore they can produce 480/120 = 4 more batches of C, which is 4 x 20 units.
Therefore they will make 80 x (2 – 0.25) = $140 more profit.
The oven costs $45, so the net increase = 150 – 45 = $95.Many Thanks to Tutor for answering my query
Can I ask last 2 question from the same mock exam for Q5 pg 310, and Q25 pg315?Why the answer is B for Q5?
Is it calculated from the lost contribution of product Y of $600-$200=$ 400
and adding the direct labour cost of product Y for 4 hours total of $80
then adding VC for product Y which is $150 +$120?
so the total is $750,Is it correct?and for Q25
What is the mean is” value of the ingredient usage variance and the mix variance are the same?”Thank you Again for your help 🙂
Q5: Y makes a contribution of 600 – 280 = 320. It takes 4 hours, and so the contribution per hour is 320/4 = $80
X takes 6 hours, so the transfer price is the marginal cost of X (270) + the contribution lost from not making Y (6 hours x 80 = 480). 270 + 480 = 750.
(I go through a similar examples in my free lectures on transfer pricing)
Q25: As I explain in my lectures, the usage variance = mix variance + yield variance.
If the yield variance was zero, then the usage variance and the mix variance would be the same (i.e. equal to each other).
- You must be logged in to reply to this topic.