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MOCK NUM 3 MCQ 5

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › MOCK NUM 3 MCQ 5

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
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  • June 8, 2021 at 8:40 am #623834
    Shi2004
    Participant
    • Topics: 79
    • Replies: 33
    • ☆☆

    Hello sir for mcq num5 im unable to understand the answer.
    The answer is :The min transfer price is the variable cost of X 270$ plus the lost contribution from not making product Y 480$.
    The lost contribution is from 1.5units of product Y. Where did it get the 1.5units of product Y??

    June 8, 2021 at 9:11 am #623850
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54702
    • ☆☆☆☆☆

    Product Y uses 80/20 = 4 hours of labour.

    Product X uses 120/20 = 6 hours of labour.

    Therefore making 1 unit of X is taking 6 hours of labour which could have been used to make 6/4 (= 1.5) units of Y.

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