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Y RM RM 120 128 32 26 40 50 20 16

Y RM RM 120 128 32 26 40 50 20 16

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QUESTION 2 Wonder Woman Sdn Bhd manufactures two products, the X and the Y, which have the following standard selling price and standard costs per unit. X Y RM RM Standard Selling Price 120 128 Direct Materials 32 26 Direct Labour 40 50 Variables Production Overhead 20 16 Variable Selling Overhead 16 27 A production line can be set up to produce either produce either product X or product Y. The following table gives the breakdown for each product. Product Labour (minutes) Material (kg) Testing (minutes) 3 X 30 Y 15 4 4 In any one week the availability of resources are expected to be subjects to the following limitations: Direct Labour (minutes) Direct Materials 1800 minutes 280 kg The production department stated that the testing equipment must be used for at least 240 minutes. Also, because of existing orders, at least 20 units of product X must be produced. Required: a. Determine by graphical means the optimal mix of X and Y at Wonder Woman Sdn Bhd. (Calculate the exact values of X and Y by using the equations of the lines as appropriate). b. Calculate the contribution achieved by adopting the optimal mix calculated in (a) above. Critically evaluate the application of linear programming in management accounting. с.
Transcribed Image Text:QUESTION 2 Wonder Woman Sdn Bhd manufactures two products, the X and the Y, which have the following standard selling price and standard costs per unit. X Y RM RM Standard Selling Price 120 128 Direct Materials 32 26 Direct Labour 40 50 Variables Production Overhead 20 16 Variable Selling Overhead 16 27 A production line can be set up to produce either produce either product X or product Y. The following table gives the breakdown for each product. Product Labour (minutes) Material (kg) Testing (minutes) 3 X 30 Y 15 4 4 In any one week the availability of resources are expected to be subjects to the following limitations: Direct Labour (minutes) Direct Materials 1800 minutes 280 kg The production department stated that the testing equipment must be used for at least 240 minutes. Also, because of existing orders, at least 20 units of product X must be produced. Required: a. Determine by graphical means the optimal mix of X and Y at Wonder Woman Sdn Bhd. (Calculate the exact values of X and Y by using the equations of the lines as appropriate). b. Calculate the contribution achieved by adopting the optimal mix calculated in (a) above. Critically evaluate the application of linear programming in management accounting. с.
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