MANAGEMENT ACCOUNTING 2A

PLEASE HELP ME ANSWER THIS TWO QUESTIONS

Question 1: (26 marks- 47 minutes) This question consists of TWO unrelated parts. PART A Each weekend in his spare time, Jack Jones uses is wood lathe to make either Jonty Rhoda or Hansie Cronje toy cricket bats. Each Jonty Rhoda bat requires 15 minutes machine time and 12 minutes finishing time, while each Hansie Cronje bat requires 20 minutes machine time and 10 minutes finishing time. Only Jack operate the lathe, for which he gives himself 15 hours, and he employs casual workers for the finishing process up to a maximum of 10 hours. Next week Jack has confirmed commitment to deliver 15 Hansie Cronje bats. Usually he can expect to sell as many bats as he can produce. Jonty Rhoda bats contribute N$8 per bat to profit and Hansie Cronje bats yield a contribution of N$9 per bat. REQUIRED Marks 1.1 Determine the objective function. 1.2. Determine the constraints 4 1.3. Determine the combination of each type of bat Jack should make this 9 weekend in order to maximise the total contribution using graphical method of linear programming. SUB-TOTAL PART B 14 PART B You are the management accountant of Pentomax (Pty) Ltd, an organisation that makes three products, Alpha, Beta and Delta Details of each product are shown below: Alpha Beta Delta Current order on hand 200 180 175 Labour hours per unit 6 5 9 Machine hours per unit 4 10 6 Fixing agent (kg per unit) 0 0 4 The gross profit per unit of each product is as follow Alpha Beta Delta N$ N$ N$ Selling price 1587 1350 2517 Less: Production costs Raw materials 510 400 800 Fixing agent 40 Direct labour 120 100 180 Production overheads Variable 21 20 30- Fixed 130 180 270 Gross prot 806 650 1197 The xed production overheads have been allocated according to an activity-based costing (ABC) system and reect the cost per unit based on current orders on hand. In other words, it is assumed that there is no production constraint. Pentomax is limited to 3 000 labour hours, 4 000 machine hours, and 1 000 kg of the xing agent [used only in the manufacturing of Delta). A fire occurred in the factory prior to the manufacture of the orders, which reduced the available machine time by half. Management has consequently made a decision to cease the manufacture of Alpha entirely [for the time being) and place all factory staff on short time, thereby reducing the available labour time to 2020 hours. REQUIRED Assuming that the re has not occurred, determine the most profitable 10 production. Based on your answer above, calculate the gross prot that would have been achieved from the optimal production mix SUB-TOTAL 12 TOTAL MARKS