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optimal production plan

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › optimal production plan

  • This topic has 5 replies, 2 voices, and was last updated 12 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • October 8, 2012 at 4:14 pm #54646
    priti1886
    Participant
    • Topics: 3
    • Replies: 10
    • ☆

    Hi
    I need help with the following question please. Part a,b and c.
    [img]https://dl.dropbox.com/u/76386923/F5/photo%201.PNG[/img]
    [img]https://dl.dropbox.com/u/76386923/F5/photo%202.PNG[/img]

    Thanks in advance

    October 9, 2012 at 7:23 am #105469
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54655
    • ☆☆☆☆☆

    Sorry – but I can only help with specific problems – not with a whole question

    October 9, 2012 at 8:38 am #105470
    priti1886
    Participant
    • Topics: 3
    • Replies: 10
    • ☆

    I am getting two answers with part as as im not sure if fixed overheads are included in variable costs or if they are not included. all the examples in the bpp book do not even mention the fixed overheads so not sure where to put it.
    i know i have to rank the beds in contribution per unit order.

    October 9, 2012 at 8:40 am #105471
    priti1886
    Participant
    • Topics: 3
    • Replies: 10
    • ☆

    the answer i got without adding fixed overhead was
    double beds 1st and 500 can be made
    single bed 2nd 500 can be made
    bunk 3rd 175 can be made
    i don’t have any answers for it so need help.

    October 9, 2012 at 12:06 pm #105472
    priti1886
    Participant
    • Topics: 3
    • Replies: 10
    • ☆

    for part b i got the answer
    profit with 500, 175 and 500 units will be $50875
    but profit with 2 extra employees it will be $50420
    still not sure where to use the fixed o/h.

    October 10, 2012 at 7:53 pm #105473
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54655
    • ☆☆☆☆☆

    Fixed overheads are, by definition, the same however many units are produced.

    It is only the contribution that will change, and so to get maximum profit you need to find the production mix that gives maximum contribution.

    Once you have got maximum contribution, then subtract whatever the total fixed overheads are and this will then give you the maximum profit figure.

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Viewing 6 posts - 1 through 6 (of 6 total)
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