The manager of a recently opened cafe is deciding how many sandwiches to make each day.
The sandwiches are made in the morning before the cafe opens.
If demand exceeds the number of sandwiches made in the morning no extra sandwiches can be made during the day. Any unsold sandwiches are thrown away at the end of each day.
Daily demand is uncertain but is predicted to be 10, 20, 30 or 40 sandwiches.
The following regret matrix has been prepared:
If the minimax regret criterion is used to make the decision, the manager will choose to make:
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:
References:
5c0e02ae-e691-41dd-b436-d41e2edaf83f: A company is using relevant costing to evaluate a make or buy decision.
The company already has a machine on an operating lease which can be used to make the product.
How would the lease rental cost be classified?
ABC uses an activity-based costing system.
The company manufactures three products, details of which are given below:
Total material movement costs for the period are $10,000.
The material movement cost per unit for Product Z (to the nearest $0.01) is:
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:
