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Hello sir,
I am confused in the question no: 21 in BPP REVISION KIT MOCK EXAM 1(September 2016 CBE)
Since its a scenario based, section B question I wont be able to type it full.
I hope u can refer to it, if possible, and answer my doubt.
Actually sir in that question its mentioned that for every increment of 50000 units, a supervisor will need to be emplyed. And one supervisors annual salary is 35000.
And we have to find flexed production cost if the production is 80% of maximum capacity( max capacity is 262500 units) . So the cost for supervisor is given in solution to be 175000 since it says that 5 supervisors will be needed.
But 210000/50000 is 4.2. Which can be rounded of n we can use 4. But then if i calculate for 4 supervisor i get the total cost as 2885000( which is the 3 rd option, and is wrong).
Please let me know sir , why 5 supervisors cost is included n not 4.
Thank u sir!Think about it – 4 supervisors will only be able to deal with 4 x 50,000 = 200,000 units.
Who is going to supervise the extra 10,000 units? It will need one more supervisor 🙂
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