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dec 2011

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › dec 2011

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
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  • October 20, 2017 at 11:36 am #412590
    adarsh1997
    Participant
    • Topics: 646
    • Replies: 282
    • ☆☆☆☆

    Hi John!

    In Bath co, it says that division B:
    Maximum annual production and sales of sets of fittings (units) 200,000
    (including internal and external sales)
    Maximum annual external demand for sets of fittings (units) 180,000
    Maximum annual internal demand for sets of fittings (units) 80,000

    – In part (a), to calculate the total sales of division B,
    120,000 units are sold externally and 80,000 units are sold internally.

    1. Why priority has been given to internal sales and not to external sales? There is no mention in the scenario that for part (a) that sales has to be made internaly first.

    Please clear this doubt!

    October 20, 2017 at 3:49 pm #412627
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54704
    • ☆☆☆☆☆

    It is mentioned in the scenario!!

    The question says that currently (which is what is relevant for part (a)) Division A is only allowed to purchase fittings from Division B. Since A is currently producing 80,000 units they must be getting them from B!

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