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June 2012/question 1

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › June 2012/question 1

  • This topic has 3 replies, 2 voices, and was last updated 11 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • May 25, 2013 at 8:30 pm #127178
    mdmkd
    Member
    • Topics: 13
    • Replies: 17
    • ☆

    Could you please help me to understand this sentence:
    “Whilst both components are currently made in batches of 500, this would need to change to batches of 400.”
    So for keypads:
    26000-4000=22000
    22000/500=44/batch
    44/batch * 400= 17.600
    I have calculated in this way, but I saw that I was wrong. If the number of batches is less (400<500) how could the cost be higher? I would appreciate if could help me realize where is my mistake 🙂

    May 25, 2013 at 8:51 pm #127179
    mdmkd
    Member
    • Topics: 13
    • Replies: 17
    • ☆

    Sorry for the question 🙂
    I found the mistake. 500 is not the number of batches, but the number of units in one batch 🙂 I should take a break :))

    May 25, 2013 at 9:08 pm #127181
    mdmkd
    Member
    • Topics: 13
    • Replies: 17
    • ☆

    I still want to ask why fixed machine costs are considered as relevant cost?

    May 26, 2013 at 7:35 am #127200
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54659
    • ☆☆☆☆☆

    It is because there are extra fixed costs payable.They vary with the number of setups.

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