Study group for p5

Hi Neena,

Thank you for asking about my admin review (I tried replying on the other forum & I could not see the reply option and my mark still stands. I decided to move on and accept the situation. Now I am working hard to improve areas of weaknesses. How are you getting on? This is my last paper and desperately want to pass.

Is it necessary to revise f5 for p5 exam? if yes then which are the core topic should i cover for the june exam.

I wish to join the group as it is also my last paper . Can anyone please solve this question , more specifically parts (c) and (d).

Thank you

Question
Stow Health Centre specialises in the provisions of sports/exercise and medical/dietary advice to clients. The service is provided on a residential basis and clients stay for whatever number of days suits their needs.
Budgeted estimates for the year ending 30 June 1999 are as follows:
(i) The maximum capacity of the centre is 50 clients per day for 350 days in the year.
(ii) Clients will be invoiced at a fee per day. The budgeted occupancy level will vary with the client fee level per day and is estimated at different percentages of maximum Capacity as follows:

Occupancy as
Client fee percentage of
per day Occupancy level, maximum capacity
$180 High 90%
$200 Most likely 75%
220 Low 60%
(iii)Variable costs are aIso estimated at one of three levels
per client day. The high most likely and low levels per client
day are $95, $85 and $70 respectively.
The range of cost levels reflect only the possible effect of the purchase prices of goods and services.
Required;
(a) Prepare a summary which shows the budgeted contribution
earned by Stow Healih Centre for the year ended 30 June 1999
for each of nine possible outcomes (6marks)
(b) State the client fee strategy for the year to 30 June 1999 which will result from the use of each of the following decision rules:
(i) maximax; (ii) maxumln: (iii) minimax regret.
Your answer should explain the basis of operation of each rule.
Use the information from your answer to (a) as relevant and
Show any additional working calculations as necessary.(9marks)
(c) The probabilities of variable cost levels occurring at the high, most likely and low levels provided in the question are estimated as 0.1, O.6 and 0.3 respectively.
Using the information available, determine the client fee Strategy which will be chosen where maximisation of expected value of contribution is used as the decision basis. (5 marks)

(d) The calculations in (a) to (c) concern contribution levels which may occur given the existing budget.
Stow Health Centre has also budget for fixed costs of $ 1,200,000 for the year t o 30 June 1999
Discuss ways in which Stow Health Centre may instigate changes, in ways other than through client fee rate, whichmay influence client demand, cost levels and profit.
Your answer should include comment on the existing budget and should incorporate illustrations which, relate to each four additional performance measurement areas appropriate to the changes you discuss. (15 marks)

available on whatassp for advice , tips and anything to help us pass P5. my number is +256772668866