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Jupiter Australasia Ltd has recently acquired the Kiewa Milk Co in north-east Victoria and you have been seconded there as part of your management accounting graduate role. The CEO of Kiewa Milk Co has mentioned the term 'production constraint' to you on a number of occasions and you are unsure what she is referring to. You decide to conduct your own research (which goes beyond the text) to find out what a 'constraint' is in a manufacturing environment.
Required:
Question 1: Discuss the notion of production capacity in a manufacturing environment. Your answer should discuss the different meanings of theoretical capacity and practical capacity as they are applied in manufacturing firms.
Question 2: Describe some of the constraints which may impact on the productive capacity of a manufacturing company. In your answer also address the 'relevant range' concept as it is applied in management accounting and as it relates to capacity constraints
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