Illustration

Department A 8X 10Y >=11000

Department B 4X 10Y >=9000
Department C 12X 6Y >=12000
Contribution 4X 8Y
Y >=600

Q6)

Skilled 10X 10Y 2000

Semi Skilled 5X 25Y 2500
X 150
Y 180
Non Negativity Constraints X,Y 0
Contribution 50x 40y 20000

0Y 500
X 400

Skilled Labour 10x 10y 2001

9500

1500 10y 2001

10y 501

y 50.1

9504

a 300

b 0.3

300-0.3Q
 90 a-0.3Q

300 a-0.3Q

150
a 450

0.6

90 450-0.6Q

0.6Q 360

Q 600

270

Q1)

b 0.4

200 a-0.4Q

400
400

600 a

a 600-0.4Q

600-0.8Q

Q 750
 100 600-0.8Q

0.8Q 500

Q 625

350

Selling Price 218750

Variable Cost 62500
Contribution 156250

Price per unit Demand Total Cost Total Revenue

50 1 44 50
47 2 56 94
44 3 71 132
41 4 85 164
38 5 95 190
35 6 110 210
32 7 122 224
29 8 135 232
26 9 145 234

365)

MAN CO
Division L Division M External Customers
Sales Price 40 40
Costs -20 -24
Contribution 20 16
Sales Price 37
Costs -20
Extra cost of Buy 17

The 120000 should be buy from Division L

Division L Division M Company

External Sales 6400000 11520000

Internal Sales 4800000

Total Sales 11200000 11520000

Variable Costs
Component L 4800000
Other 3360000 2040000
Direct Labour 1680000 1080000
Variable Overheads 560000 360000
Selling and Distribution Costs 640000 120000
Annual Fixed Overhead 500000 200000
6740000 8600000

4460000 2920000 7380000

Expected sales for Q3 2025

a 4000
b 35

a+bx

4735

251)

MPPV -22000
252)
MPOV -13000
253)
MUOV -8000
263)

Labour Efficiency Planning Variances

(SH-RSH)*OSR

SH 7500
RSH 5000
OSR 15

(SH-RSH)*OSR 37500 F

Test Your Understanding 9

Minimum Price 30

Maximum price 65

Hair Co
C S D
Selling Price 110 160 120
Units 20000 22000 26000
Variable Costs 50 104 92
Contribution 60 56 28
Revenue 2200000 3520000 3120000
Contribution 1200000 1232000 728000

Weighted Average CS Ratio 0.3574660633484

Total Break even revenue 1790379.7468354

HMF CO
Price
Demand 400 450 500
120 560000 577500 570000
160 480000 507500 510000
210 380000 420000 435000
17500 0 7500
30000 2500 0
55000 15000 0
Outcome 1 Outcome 4
Sales 800000 Sales
Variable Costs -240000 Variable Costs

560000

Outcome 2 Outcome 5

Sales 800000 Sales

Variable Costs -320000 Variable Costs

480000

Outcome 3 Outcome 6

Sales 800000 Sales

Variable Costs -420000 Variable Costs

380000

165 GAM CO

Probablity 0.4 0.5 0.1

Sales 3600000 3300000 4200000

Variable Costs -1320000 -1210000 -1540000
Advertising Costs -900000 -900000 -900000
Fixed Costs -450000 -450000 -450000

930000 740000 1310000

Probablity 0.3 0.3 0.4

Sales 3780000 3500000 3290000

Variable Costs -1188000 -1200000 -1128000
Advertising Costs -970000 -970000 -970000
Fixed Costs -450000 -450000 -450000

1172000 880000 742000

MR MC MR=MC Profit

50 44 6 6
44 12 32 38
38 15 23 61
32 14 18 79
26 10 16 95
20 15 5 100
14 12 2 102
8 13 -5 97
2 10 -8 89
 8840000
3160000

Maximax 560000 380000 17500 0 7500

577500 420000 30000 2500 0
570000 435000 55000 15000 0

Price 450 500 55000 15000 7500

500
Outcome 4
 787500 Sales 750000
-210000 Variable Costs -180000

577500 570000

Outcome 5

787500 Sales 750000

-280000 Variable Costs -240000

507500 510000

Outcome 6

787500 Sales 750000

-367500 Variable Costs -315000

420000 435000

873000 740000

912400 742000