Link Components plc manufactures 2 products for the manufacture of electric motor vehicles, X and Y. Cost information is as follows: X Y Selling price ……… ……… …….. £37.50 £42.00 Materials ……… ……… …….. £13.50 £31.50 Labour ……… ……… …….. £ 6.00 £ 2.50 Other variable costs ……… …….. £10.50 £ 2.00 Fixed costs ……… ……… …….. £ 4.50 £ 3.50 £34.50 £39.50 Profit ……… ……… …….. £ 3.00 £ 2.50 Machine hours per unit: 3 hours for product X and 1.5 hours for product Y. Maximum demand: 30,000 units of product X, and 18,000 units of product Y. The total machine hours available: 105,000 hours Required: b) The production manager at Link Components argues that by focusing exclusively on financial performance, accountants provide no real solutions for improving the firm. Critique this perspective.
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Link Components plc manufactures 2 products for the manufacture of electric motor vehicles, X and Y. |
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Cost information is as follows: |
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X |
Y |
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Selling price |
……… |
……… |
…….. |
£37.50 |
£42.00 |
|
Materials |
……… |
……… |
…….. |
£13.50 |
£31.50 |
|
Labour |
……… |
……… |
…….. |
£ 6.00 |
£ 2.50 |
|
Other variable costs |
|
……… |
…….. |
£10.50 |
£ 2.00 |
|
Fixed costs |
……… |
……… |
…….. |
£ 4.50 |
£ 3.50 |
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£34.50 |
£39.50 |
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Profit |
……… |
……… |
…….. |
£ 3.00 |
£ 2.50 |
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Machine hours per unit: 3 hours for product X and 1.5 hours for product Y. |
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Maximum demand: 30,000 units of product X, and 18,000 units of product Y. |
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The total machine hours available: 105,000 hours Required: b) The production manager at Link Components argues that by focusing exclusively on financial performance, accountants provide no real solutions for improving the firm. Critique this perspective. |
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