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Hey Sir,
The below question is from BPP Revision kit , page no. 52 question no. 138
I am failed to understand that how they have calculated m^2 of M1 unit and not understanding why is it needed to be calculated?I only have the current edition of the BPP Revision Kit, and question 138 is not on page 52 (and has not mention of M1).
If you type the first few words of the question then maybe I will be able to find it (because it likely is somewhere in the current edition 🙂 )
Yes sure sir,
Metallica Co is an engineering company that manufactures a number of products, using a team of highly skilled
workers and a variety of different metals. A supplier has informed Metallica Co that the amount of M1, one of the
materials used in production, will be limited for the next three-month period.
It has 5 parts of the question in which I wanted to ask
Metallica Co carried out some market research which suggested that a change should be made to the selling
price of both Product P4 and P6. As a result, the new contribution per unit for P4 is $85 and for P6 it is $95.
Which of the following answers is correct?
I have copied 2-3 lines from the starting of the question.It is the square meters of M1 that are limited and therefore we need the contribution per square meter.
The cost per unit of M1 used in product P4 is $15. Given that M1 costs $20 per square meters, each unit of P4 must be using 15/20 = 0.75 square meters.
If you mean ‘why did they calculate the contribution per square meter’ then that it what we always do when there is just one limited resource – we calculate the contribution per unit of the limited resource. It is is throughput accounting then we calculate the throughput per unit of the limited resources, but that is only relevant if the question specifically asks for a throughput accounting approach.
All of this is explained in my free lectures – you say that you have watched them all which is why I am surprised that you are asking this question 🙂
I sincerely apologize I made a terrible mistake I was getting confused that from where did u get 20 and I missed that line (even after reading it twice ).
Aplogizes and thank you
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