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:
Budgeted sales and production for Product X for this period are 12,000 units.
The standard cost and selling price for a single unit of the product are:
The fixed production overhead expenditure variance is:
A company makes two products, product X with a contribution per unit of $10 and product Y with a contribution per unit of $4.
These products are sold in the mix 3:2 by volume and fixed costs are $38,000 per period.
The breakeven point for product Y, based on the expected sales mix is:
Which costing method, used in just-in-time (JIT) production systems, attaches cost directly to output rather than following the flow of product through the production process?
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?
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