q17

Linear programming is used by decision makers when there are:

A.

multiple scarce resources.

B.

limited resources for labour

C.

scarce resources for either labour or machine hours.

D.

scarce resources for machine hours.

q18

The managing director of Winz Limited is setting the production plan for the next financial year. Winz has a shortage of machine labour and wishes to maximise the profitability of the company. Winz manufactures three products A, B and C. There is 150,000 hours of machining available in the year at a cost of $10 per hour. The following information relates to each product.

	A				B				C
Selling price per unit		$	30		$	54		$	66
Materials cost per unit		$	16		$	18		$	34
Machine hours per unit			2			3			4
Maximum demand			30 000			30 000			40 000

Assuming all relevant information is provided, in what order should Winz manufacture its products to maximise profit in the current year?

A.

None of the given answers

B.

B, C then A

C.

B then C

D.

A, C then B

q18

BDC Company manufactures a single product, A1. The standard cost specification sheet shows the following standards for one unit of A1:

3kg of material X @ $15 per kg		$45
2 hours of direct labour @ $16 per direct labour hour		$32
A total of 6000 A1 were produced during June. Actual costs incurred during June were: 20,000 kg of material X were purchased @ 13.5 per kg. 22,000 kg of material X were used. 18,000 direct labour hours were worked at an average wage rate of $15 per hour. Calculate the direct labour efficiency variance

A.

$96,000 (F)

B.

$96,000 (U)

C.

$18,000 (F)

D.

$18,000 (U)