Reference no: EM13183192
More Limited produces four types of electric motors. Type X and Y are sold by the business to external customers. The other two types A and B are a component in some of the business's other products. Costings per unit are as follows;
|
Electric Motors
|
X
|
Y
|
A
|
B
|
|
|
£
|
£
|
£
|
£
|
|
Variable materials
|
15
|
20
|
16
|
17
|
|
Variable labour
|
25
|
10
|
10
|
15
|
|
Other variable
|
5
|
3
|
2
|
2
|
|
Fixed cost
|
20
|
8
|
8
|
12
|
|
|
=====
|
====
|
====
|
====
|
|
Total cost
|
65
|
41
|
36
|
46
|
|
Selling price(per unit)
|
£60
|
£43
|
|
|
All four products make use of a specialist machine in their manufacture. The time required for each product on the specialist machine and the demand for each product for next year is given below;
|
|
Time on Specialist Machine per unit
|
Demand
|
|
|
|
Product X
|
0.5 hours per unit
|
5,000 units
|
|
|
|
Product Y
|
0.4 hours per unit
|
6,000 units
|
|
|
|
Product A
|
0.5 hours per unit
|
4,000 units
|
|
|
|
Product B
|
0.3 hours per unit
|
3,000 units
|
|
|
The maximum capacity of the specialist machine for next year is limited to 6,000 hours.
For business reasons the organisation wishes to supply at least 30% of the demand for products X and Y. There is an external supplier who is prepared to supply unlimited quantities of products A and B, at a price of £40 and £61 respectively.
Required
1. Calculate the optimum production plan the firm should follow next year given the above constraints.
2. Calculate the maximum amount it would be worth the firm paying per hour, to rent an additional specialist machine.
3. Other than renting a specialist machine, what could More Limited do to solve the problem of shortage of specialist machine time?
4. Critically discuss the use of marginal costing and absorption costing in the decision making process
|
Financial analysts use revenue per employee
: Most financial analysts use revenue per employee as a gauge on how successful the workforce is. Although an important measure, this metric does not tell the story." Make sure you justify your position.
|
|
What happens to the demand for diet cola brand
: Ceteris paribus, Diet Cola Brand X and Diet Cola Brand Y are substitutes in consumption. The price of Diet Cola Brand Y falls. a. What happens to the demand for Diet Cola Brand X? b. What happens to the demand for Diet Cola Brand Y?
|
|
Patients prior to receiving medical treatment
: What is the importance of obtaining written consent from patients prior to receiving medical treatment? What are the implications of failing to do so? Does a medical emergency alter the conditions of written consent?
|
|
What would the purchase price
: A company has issued 10-year bonds, with a face value of $1,000,000, in $1,000 units. Interest at 8% is paid quarterly. If an investor desires to earn 12% nominal interest (compounded quarterly) on $10,000 worth of these bonds, what would the pur..
|
|
Calculate the optimum production plan the firm
: Calculate the optimum production plan the firm should follow next year given the above constraints and calculate the maximum amount it would be worth the firm paying per hour, to rent an additional specialist machine.
|
|
Symptoms of a deficiency in the structure of an organization
: Organizational Theory and Design: What are the symptoms of a deficiency in the structure of an organization?
|
|
Calculate the price of elasticity of demand
: When te price of milk increases from $2.35 to $2.50 per gallon, the quanitity demanded falls from 100 gallons to 90 gallons. When the price of paperback books fall from $7.00 to $6.50, the quantity demanded rises from 100 to 150.When the rent on apar..
|
|
Find a value of the lagrange multiplier
: If the firm can not produce in total more than 14 units, then what would be the maximum profit and the optimal values of Q1 and Q2? Find an answer using the Lagrange multiplier. Find a value of the Lagrange multiplier. What economic interpretation..
|
|
Compute the final pressure in the flask at 0c
: if 2 mole of N2 and 5 mole of H2 in a closed container initially at STP react, calculate the final pressure in the flask at 0C.
|