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Can anyone remember their answers for Question 4 part b), when working out the return on investment and residual income?

I think I got 15% for Division A, and 18% for Division B (ROI)

The residual income came out somewhere around $2.2 - $2.5m for each I think, although Division A had the higher RI.

Can anyone remember their answers for Question 4 part b), when working out the return on investment and residual income?

I think I got 15% for Division A, and 18% for Division B (ROI)

The residual income came out somewhere around $2.2 – $2.5m for each I think, although Division A had the higher RI.

I got the same answers. :)

With Question 5 and the Throughput accounting, I think I worked out procedure C's ratio as 8.7 something?

Then for the mix I recommended that they fulfil demand for procedures B, then A, and then use the balance of the surgeon's time on procedure C, as C had the lowest TA ratio.

There wasn't enough surgeon's time left to completely fulfil the demand for C. It think there was about enough left for ~500 procedures.

@bibavuk said:
Can anyone remember their answers for Question 4 part b), when working out the return on investment and residual income?

I think I got 15% for Division A, and 18% for Division B (ROI)

The residual income came out somewhere around $2.2 – $2.5m for each I think, although Division A had the higher RI.

I got the same answers. :)

AWESOME :D

I do not think this is a difficult paper. If you did 5 revision Qs in this open tution alone you can get atleast most parts of 3 questions correctly ( maximax, learning curves and throughput). that alone will give you enough to pass. Also flexed budget is so easy so 4 out of 5 questions can be done easy.
Q4 was the only one tricky for me.
Thank you open tution

@curiousmeerkat said:
I had the three different production levels on the right hand side (350,000 bags, 280,000 bags and 200,000 bags), and the three different weather conditions along the top.

The contribution per bag was $5. Depending on the amount produced and the weather, I basically did (Production x $5) - (Difference between Production and Demand x $0.50), as if they weren't sold it cost $0.50 to be scrapped.

That's what I put, I hope it is right as I'd like the 8 marks!

Hi,

How did you work out demand? Based on probabilities?

I got enough time to do 504 C procedures...

I think there was a lot of calculations to do within the time. TPAR I changed the one of the calculations 3 times. There was a lot of information in the scenarios which were all relevant to the question but not enough time to absorb the scenario - go go go !!

The question about the Air Conditioning company, I think I got:

P = 750 - 0.0015Q

My mind went blank with learning curves, but I got 1.06...ish hours from the equation. I'm not sure this is right though, as that would be the cumulative time instead of the actual time for the 100th unit. Although, even if I get it wrong I should still be able to get marks for the next bit?

Using the adjusted labour time I got the marginal cost to be about $50.54 ish and put that into the demand equation to get something like a selling price of $400.

Finally I after talking about the pricing strategies I recommended that the company use skimming as their patent prevented any competition for 2 years, and they should use a higher price to recoup the R&D costs and emphasise to customers how much more efficient their product is.

@bibavuk said:
I got enough time to do 504 C procedures...

Yeah that sounds about it.

no u did not miss anything. that was the right thing to do in no 5

@curiousmeerkat said:
The question about the Air Conditioning company, I think I got:

P = 750 - 0.0015Q

My mind went blank with learning curves, but I got 1.06...ish hours from the equation. I'm not sure this is right though, as that would be the cumulative time instead of the actual time for the 100th unit. Although, even if I get it wrong I should still be able to get marks for the next bit?

Using the adjusted labour time I got the marginal cost to be about $50.54 ish and put that into the demand equation to get something like a selling price of $400.

Finally I after talking about the pricing strategies I recommended that the company use skimming as their patent prevented any competition for 2 years, and they should use a higher price to recoup the R&D costs and emphasise to customers how much more efficient their product is.

I meant demand in profit table? Cheers

@nomipk3 said:
Hi,

How did you work out demand? Based on probabilities?

For part a) I didn't work out demand at all. It said the company was going to choose to produce at one of those three demand levels. So I worked out the contribution at each production level, but where the weather meant that the demand was less than what had been produced, reduced the contribution by the unsold units x $0.50 to get the profit.

If that makes sense. It is hard to explain, and it took me a while to get my head around it in the exam.

Was the whole idea of the exam to trick us or to test our Accountancy knowledge?? I am sure I will fail this exam but honestly speaking just because I did no do well on this exam I will not look at myself down or consider myself as if I am not good enough to be an Accountant.First of all the topic of F5 is to wide to cover then again examiners do not seem to consider the time pressure in the exam room and bring up tricky questions .....!!!

for a demand of 350000 bags n in good weather condition. sales will be (9 -4)* 87500 ( less the unsold portion multiplied by 0.50.) did i miss anything

What did you all get for the very last part of question 5? Should they equip the theatre? I answered that they should...

for a demand of 350000 bags n in good weather condition. sales will be (9 -4)* 87500 ( less the unsold portion multiplied by 0.50.) did i miss anything

@bibavuk said:
What did you all get for the very last part of question 5? Should they equip the theatre? I answered that they should...

Yeah I said they should too. Essentially they were upping the capacity of the bottleneck resource.

@danny124 said:
for a demand of 350000 bags n in good weather condition. sales will be (9 -4)* 87500 ( less the unsold portion multiplied by 0.50.) did i miss anything

Why 87,500? If they produced 350,000 bags and it was good weather they should sell them all, meaning no disposal costs. So profit = 350,000 x $5 = $1,750,000.

I hope.

@danny124 said:
for a demand of 350000 bags n in good weather condition. sales will be (9 -4)* 87500 ( less the unsold portion multiplied by 0.50.) did i miss anything

I thought there is no unsold portion since good weather condition =350,000 bags same as demand 350,000 bag ?

It was a tough paper indeed

@danny124 said:
for a demand of 350000 bags n in good weather condition. sales will be (9 -4)* 87500 ( less the unsold portion multiplied by 0.50.) did i miss anything

I did the same way and you know it took me ages and cost me the time of 1 full question. But I did full 4 questions.

@curiousmeerkat said:
Why 87,500? If they produced 350,000 bags and it was good weather they should sell them all, meaning no disposal costs. So profit = 350,000 x $5 = $1,750,000.

I hope.

yea, i think we got the same ans ! awesome.

@bibavuk said:
I got enough time to do 504 C procedures...
yes got this too.

@bibavuk said:
I got enough time to do 504 C procedures...

@curiousmeerkat said:
Yeah that sounds about it.

difficult paper indeed...didn't tick the questions i attempted at the front of th booklet possible consequences??

@nomipk3 said:
I meant demand in profit table? Cheers

I got the demand fn of 750 - 0.015Q rather than 0.0015

For those who found it manageable well done keep the good work up!!

For the rest of us who are left in cold either due to shortage of time to prepare ourselves or due to the nature of the exam ,let us learn a lesson from our past and focus on the future.

Regards

any idea for payoff table ? 350, 280, 200 '000 and 25, 45, 30 percent?

guys how u calculate the demand equation? as per question......for each 15$ increase there will b 1000 units fall.....so I took 735 selling price and 1000 units , n then deducted the selling price by 15$ ie. 720 and 2000 units.........I calculated based on this.......I donno wether its correct or wrong.....

@eimearnid said:
I got the demand fn of 750 - 0.015Q rather than 0.0015

Yes I got 0.015, my extra zero was a typo. Apologies.