1. A company produces three products D, E and F. The statement below shows the selling price and product costs per unit for each product, based on a traditional absorption costing system. Each of the products is produced using Process A which has a maximum capacity of 2,500 hours per period. If a throughput accounting approach is used, the ranking of products, in order of priority, for the profit maximizing product mix will be:

2. JRL manufactures two products from different combinations of the same resources. Unit selling prices and unit cost details for each product are as follows: * Refer to your answer in the previous question. The optimal solution to the previous question shows that the shadow prices of skilled labour and direct material A are as follows: Skilled labour $ Nil Direct Material A $11.70 Explain the relevance of these values to the management of JRL. Select the true statement.

3. RS is a travel company providing daily tours of a major European capital city. The market is highly competitive and RS has commissioned some market research to help with the pricing decision for a new tour. The research identified the probability of three possible market conditions and the number of tickets that would be sold each day at three different price levels. Demonstrate, using a decision tree and based on expected value, which ticket price RS should choose.

4. A company uses a standard costing system. The company

5. JRL manufactures two products from different combinations of the same resources. Unit selling prices and unit cost details for each product are as follows: Identify, using graphical linear programming, the weekly production schedule for products J and L that will maximize the profits of JRL during the next four weeks.

6. A company sells and services photocopying machines. Its sales department sells the machines and consumables, including ink and paper, and its service department provides an after sales service to its customers. The after sales service includes planned maintenance of the machine and repairs in the event of a machine breakdown. Service department customers are charged an amount per copy that differs depending on the size of the machine. The company

7. JRL manufactures two products from different combinations of the same resources. Unit selling prices and unit cost details for each product are as follows: Identify, using graphical linear programming, the weekly production schedule for products J and L that will maximize the profits of JRL during the next four weeks.

8. A master budget comprises the...

9. QR uses an activity based budgeting (ABB) system to budget product costs. It manufactures two products, product Q and product R. The budget details for these two products for the forthcoming period are as follows: The total budgeted cost of setting up the machines is $74,400. What was the budgeted machine set up cost per unit of product Q?

10. A healthcare company specializes in hip, knee and shoulder replacement operations, known as surgical procedures. As well as providing these surgical procedures the company offers pre operation and post operation in-patient care, in a fully equipped hospital, for those patients who will be undergoing the surgical procedures. Surgeons are paid a fixed fee for each surgical procedure they perform and an additional amount for any follow-up consultations. Post procedure follow-up consultations are only undertaken if there are any complications in relation to the surgical procedure. There is no additional fee charged to patients for any follow up consultations. All other staff are paid annual salaries. The company

11. A company has budgeted to produce 5,000 units of Product B per month. The opening and closing inventories of Product B for next month are budgeted to be 400 units and 900 units respectively. The budgeted selling price and variable production costs per unit for Product B are as follows: Total budgeted fixed production overheads are $29,500 per month. The company absorbs fixed production overheads on the basis of the budgeted number of units produced. The budgeted profit for Product B for next month, using absorption costing, is $20,700. Prepare a marginal costing statement which shows the budgeted profit for Product B for next month. What was the difference between the profit calculation using marginal costing and the profit calculation using absorption costing?

12. A master budget comprises the...

13. XY can choose from four mutually exclusive projects. The projects will each last for one year and their net cash inflows will be determined by market conditions. The forecast net cash inflows for each of the possible outcomes are shown below. If the company applies the maximax criterion the project chosen would be:

14. A decision maker that makes decisions using the minimax regret criterion would be classified as:

15. TP makes wedding cakes that are sold to specialist retail outlets which decorate the cakes according to the customers

16. A healthcare company specializes in hip, knee and shoulder replacement operations, known as surgical procedures. As well as providing these surgical procedures the company offers pre operation and post operation in-patient care, in a fully equipped hospital, for those patients who will be undergoing the surgical procedures. Surgeons are paid a fixed fee for each surgical procedure they perform and an additional amount for any follow-up consultations. Post procedure follow-up consultations are only undertaken if there are any complications in relation to the surgical procedure. There is no additional fee charged to patients for any follow up consultations. All other staff are paid annual salaries. The company

17. JRL manufactures two products from different combinations of the same resources. Unit selling prices and unit cost details for each product are as follows: The optimal solution in the previous question shows that the shadow prices of skilled labour and direct material A are as follows: Skilled labour $ Nil Direct material A $11.70 Explain the relevance of these values to the management of JRL. What is the additional contribution that can be earned?

18. A healthcare company specializes in hip, knee and shoulder replacement operations, known as surgical procedures. As well as providing these surgical procedures the company offers pre operation and post operation in-patient care, in a fully equipped hospital, for those patients who will be undergoing the surgical procedures. Surgeons are paid a fixed fee for each surgical procedure they perform and an additional amount for any follow-up consultations. Post procedure follow-up consultations are only undertaken if there are any complications in relation to the surgical procedure. There is no additional fee charged to patients for any follow up consultations. All other staff are paid annual salaries. The company

19. EF manufactures and sells three products, X, Y and Z. The following production overhead costs are budgeted for next year: Required: Calculate the total budgeted production overhead cost for each product using activity based budgeting.

20. LM operates a parcel delivery service. Last year its employees delivered 15,120 parcels and travelled 120,960 kilometers. Total costs were $194,400. LM has estimated that 70% of its total costs are variable with activity and that 60% of these costs vary with the number of parcels and the remainder vary with the distance travelled. LM is preparing its budget for the forthcoming year using an incremental budgeting approach and has produced the following estimates:

21. QR uses an activity based budgeting (ABB) system to budget product costs. It manufactures two products, product Q and product R. The budget details for these two products for the forthcoming period are as follows: The total budgeted cost of setting up the machines is $74,400. Select potential benefits of using an activity based budgeting system.

22. A company uses an activity based costing system. The company manufactures three products, details of which are given below:

23. TP makes wedding cakes that are sold to specialist retail outlets which decorate the cakes according to the customers

24. QR uses an activity based budgeting (ABB) system to budget product costs. It manufactures two products, product Q and product R. The budget details for these two products for the forthcoming period are as follows: The total budgeted cost of setting up the machines is $74,400. What was the budgeted machine set up cost per unit of product Q?