User Account

All Pages

What do you understand by the Limiting factor

Assignment Help Cost Accounting
Reference no: EM132827475

Question - Analyze the following case-study - A company manufactures 2 products 'XZ' and 'YZ' using a single production process. The following cost data is available for the same:

Particulars

'XZ'

'YZ'

Selling price per unit

Rs 40

Rs 60

Variable cost per unit

Rs 22

Rs 32

Machine hours required per unit

2

4

Demand in units

200000

500000

Total machine hours available: 800,000 hours.

Fixed Costs: Rs 52,00,000.

Considering the limiting factors of machine-hours and market demand, you are required to

a) Indicate the best combination of products to give an optimum contribution. Prepare a statement showing a profit at that optimal mix.

b) Show the additional machinery requirement that can be met by renting machines at an annual rent of Rs. 125,000 per machine and providing an additional capacity of 60,000 hours per machine. Also, prepare a Profitability statement if the additional machines are taken on hire.

c) What do you understand by the 'Limiting factor'? How is it relevant for deciding the optimal product mix? What could be the 'limiting factor' in terms of resources for the business?

Reference no: EM132827475

Questions Cloud

Are you surprised that poor interpersonal skills dominate : With such low success measures, what would you do to increase the likelihood of hiring the right people for the right roles?
Identify structural misalignments : Analyzing a process using the RAEW tool can help identify structural misalignments that impede strategy execution.
What is the value of this stock at a discount rate : Unique Stores common stock pays a constant annual dividend of $1.75 a share. What is the value of this stock at a discount rate of 13.25 percent
Identifying an organizations diversification strategy : Begin by identifying an organizations diversification strategy that did not succeed in creating competitive advantage
What do you understand by the Limiting factor : Total machine hours available: 800,000 hours. What do you understand by the 'Limiting factor'? How is it relevant for deciding the optimal product mix
Why are financial ratios used so widely in businesses : Why are financial ratios used so widely in businesses? Of all the ratios you have learned, which one (or two) do you think are the most important? Why?
Why is program being considered for organization : What systems issues will it address; what new services will be provided, or existing systems modified? Why is program being considered for organization?
Discussed varying viewpoints of negotiations : Over the past few weeks we have discussed varying viewpoints of negotiations. No one method may work for all situations.
Describe importance of project charter to project manager : Describe the importance of a project charter to the project manager. List three important items that belong within a project management plan,

Reviews

Write a Review

Cost Accounting Questions & Answers

  Compute the fixed portion of the predetermined

Compute the fixed portion of the predetermined overhead rate for the year. Compute the fixed overhead budget and volume variances.

  Calculate net advantage of closing the downtown store

Calculate the Net advantage of closing the Downtown Store and what recommendation would you make to the management of Thrifty Markets, Inc.?

  Prepare flexible budget apart of preparing a master budget

CVD Sdn Bhd (CVDSB), Discuss ONE (1) reason why it is important for CVDSB to prepare flexible budget apart of preparing a master budget

  How the company might change the accounting system

How the company might change its accounting system to better reflect the reporting? problems? Are there other problems with the purchasing? area?

  How much will be the cost of the ending inventory

Under periodic inventory method, how much will be the cost of the ending inventory? Under periodic inventory method, how much is the cost per unit?

  Evaluating the purpose of variance analysis

Prepare a budget showing purchases, cost of goods sold and inventory for the nine months ended 30 September - Write a business report describing budgeting as a non-technical process

  Explain the ethical issues in budgeting

Describe the alternative approach in budgeting such as zero- base budgeting , activity based budgeting and kaizen. Explain the ethical issues in budgeting

  Compute the net present value for hillsong inc

Compute the net present value for Hillsong Inc. Hillsong Inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine

  What is the cost of goods units of job for deanne corp

Deanne Corp. manufactures surgical instruments to the exacting specification of customers. What is the cost of goods units of Job 234?

  Advise as to the liability of all the parties

Write a report on given case study and Advise as to the liability of ALL the parties both under common law and the Corporations Law.

  What the equivalent units for march conversion costs were

Materials are added at the beginning of the process. Using the FIFO method, the equivalent units for March conversion costs were?

  What are the total equivalent units for direct

The units in ending WIP Inventory were 90% complete for materials and? 50% complete for conversion costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd