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
