D3 makes 2 types of toilets - the Executive (Ex) and the Classic (CI). Direct labour costs $6 per hr and overheads are absorbed on a machine hour basis. The overhead absorption rate for the period is $28 per machine hour. What is the traditional cost per unit for (Ex) and (CI)?
Answer: C
Question 2
Which TWO of the following statements are true for obtaining a reliable forecast from a time series?
Answer: B,C
Question 3
THS produces two products from different combinations of the same resources. Details of the products are shown below:
Identify, using graphical linear programming, the optimal production plan for products E and R to maximize THS's profit in the month.
Answer: D
Question 4
A company's budget for the next period shows that it would breakeven at sales revenue of $800,000 and fixed costs of $320,000.
The sales revenue needed to achieve a profit of $200,000 in the next period would be:
Answer: D
Question 5
A university is trying to decide whether or not to advertise a new post-graduate degree programme. The number of students starting the programme is dependent on economic conditions. If conditions are poor, it is expected that the programme will attract 40 students without advertising. There is a 60% chance that economic conditions will be poor. If economic conditions are good it is expected that the programme will attract only 20 students without advertising. There is a 40% chance that economic conditions will be good.
If the programme is advertised and economic conditions are poor, there is a 65% chance that the advertising will stimulate further demand and student numbers will increase to 50. If economic conditions are good, there is a 25% chance the advertising will stimulate further demand and numbers will increase to 25 students.
The profit expected, before deducting the cost of advertising, at different levels of student numbers are as follows:
The cost of advertising the programme will be $15,000.
Required:
Demonstrate, using a decision tree, whether the programme should be advertised.