Exam 25: The Application of Linear Programming to Management Accounting

Figure 25-6 Anderson Company manufactures two different products: A and B. The company has 100 kgs of raw materials and 300 direct labour-hours available for production. The time requirements and contribution margins per unit are as follows: A B Raw materials per unit (lbs.) 1 2 Direct-labour hours per unit 4 2 Contribution margin per unit E4 E5 -Refer to Figure 25-6. What is the equation for the constraint on raw materials?

Figure 25-5 The following information is available for Walters Furniture Company, which sells two products: Table X Table Y Processing time 4 hours 6 hours Metal used 30.. 18.. Selling price £200.00 £100.00 Variable cost £150.00 £60.00 Fixed cost £30.00 £30.00 There are 200 hours available in the plant and 200 square metres of metal available per operating period. -Refer to Figure 25-5. The constraint equation representing processing time available is

Figure 25-2 Heft Company produces A and B with contribution margins per unit of £40 and £30, respectively. Only 500 labour hours and 300 machine hours are available for production. Time requirements to produce one unit of A and B are as follows: Product A Product B Labour hours per unit 5 2 Machine hours per unit 1 4 -Refer to Figure 25-2. What is the objective function to maximize profits for Heft Company?

Figure 25-7 The following information is available for the Johnson Boat Company, which sells two products: 3- Person Raft Kayak (Variable A ) (Variable B) Selling price £50 £80 Variable costs £35 £50 Fixed costs (average) £10 £20 Processing time 2 hours 4 hours Vinyl cover used 16.. 12.. There are 100 hours available in the plant and 75 square metres of vinyl available per operating period. -Refer to Figure 25-7. Which of the following statements is NOT correct?

Figure 25-4 The following information is available for Wilson Trailer Company, which sells two products: Trailer A Trailer B Processing time 2 hours 4 hours Vinyl cover used 16 sq. ft. 12 sq. ft. Selling price £50.00 £80.00 Variable cost £35.00 £50.00 Fixed cost £10.00 £20.00 There are 100 hours available in the plant and 75 square metres of vinyl available per operating period. -Refer to Figure 25-4. What is the objective function for maximizing profits?

Figure 25-3 Tiffany Manufacturing Company produces X and Y with contribution margins per unit of £10 and £90, respectively. Only 200 labour hours and 400 machine hours are available for production. Time requirements to produce one unit of X and Y are as follows: Product A Product B Labour hours per unit 1 2 Machine hours per unit 5 1 -Refer to Figure 25-3. What is the constraint on labour hours for Tiffany Manufacturing Company?

Figure 25-3 Tiffany Manufacturing Company produces X and Y with contribution margins per unit of £10 and £90, respectively. Only 200 labour hours and 400 machine hours are available for production. Time requirements to produce one unit of X and Y are as follows: Product A Product B Labour hours per unit 1 2 Machine hours per unit 5 1 -Refer to Figure 25-3. What is the constraint on machine hours for Tiffany Manufacturing Company?

A linear programming problem has the following objective function: 20A + 40B + 60C If the optimal solution provided by the model is to produce and sell 100, 200, and 300 units of A, B, and C, respectively, what is the expected profit?

Figure 25-2 Heft Company produces A and B with contribution margins per unit of £40 and £30, respectively. Only 500 labour hours and 300 machine hours are available for production. Time requirements to produce one unit of A and B are as follows: Product A Product B Labour hours per unit 5 2 Machine hours per unit 1 4 -Refer to Figure 25-2. What is the constraint on labour hours for Heft Company?

Figure 25-1 Hassel Company manufactures two different products, X and Y. The company has 100 kgs of materials and 300 direct labour hours available for production. The time requirements and contribution margins per unit are as follows: Product X Product Y Contribution margin per unit £4 £5 Materials per unit (lbs.) 1 2 Direct labour hours per unit 4 2 -Refer to Figure 25-1. What is the equation for the constraint on direct labour?