題目

A company wants to decide whether to make its materials in-house or whether to sub-contract?production to an external supplier. In the past it has made four materials in-house, but demand in?the next year will exceed in-house production capacity of 8,000 units. All four materials are made?on the same machines and require the same machine time per unit: machine time is the limiting?production factor. The following information is available.?



If a decision is made solely on the basis of short-term cost considerations, what materials?should the company purchase externally??

A

?4,000 units of W and 1,000 units of Z?

B

?4,000 units of W and 4,000 units of Z?

C

?3,000 units of Y and 2,000 units of Z?

D

1,000 units of Y and 4,000 units of Z?

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Chapter6Short-termdecisions

The correct answer is: 4,000 units of W and 4,000 units of Z.?


It would save $1,000 in cash to buy Material W externally. If full production can be achieved?for the other materials, only W would be purchased externally. However, there is insufficient?capacity to produce all three materials in-house.?

If in-house production of Material Z is reduced to 3,000 units, the additional cost of external?purchase would be only $6,000, so that $1,000 would be saved by purchasing all of Z externally.?

The easiest way of understanding this is to look at the total costs associated with Product Z?depending on which course of action is chosen:

?? Buy them all in ($12 × 4,000 units) = $48,000

?? Buy in 1,000 ($12 × 1,000) = $12,000 and make the remaining 3,000 ($10 × 3,000)?+ 7,000 specific fixed costs = $49,000?

Therefore it is best to buy in all 4,000 units despite having the capacity to make 3,000.?

多做幾道

?The following statements have been made about material price planning variances:?

(1) The publication of material price planning variances should always lead to automatic?updates of standard costs.?

(2) The causes of material price planning variances do not need to be investigated by?managers at any level in the organisation.?

Which of the above statement(s) is/are true??

A

?(1) only?

B

?(2) only?

C

?Neither (1) nor (2)?

D

?Both (1) and (2)?

?Leaf limited has had a mixed year. Its market share has improved two percentage points to?20% but the overall market had contracted by 5% in the same period.? The budgeted sales?were 504,000 units and standard contribution was $12 per unit.?

?What is the level of actual sales??

A

?Two percentage points up on budget at 510,080 units?

B

?Three percent down overall on budget at 488,880 units?

C

?Three percent up on budget at 519,120 units?

D

?Up by a little over five and a half percent to 532,000 units?

?The finance director of Paint Mixers Ltd has produced the table below showing the variance?results for the first three months of the year:?

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?January? ? ? ? ? ? ? ? ? ? February? ? ? ? ? ? ? ? ? ?March?

Material price variance? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? $3,000 A? ? ? ? ? ? ? ? ? ?$2,000 A? ? ? ? ? ? ? ? ?$1,000 A?

Material mix variance? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?$2,000 A? ? ? ? ? ? ? ? ? ? ? $750 A? ? ? ? ? ? ? ? ? ? ?$100 F?

Material yield variance? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?$4,000 A? ? ? ? ? ? ? ? ? ?$2,000 A? ? ? ? ? ? ? ? ? ? ? ? $50F?

Which of the following interpretations of the variances analysis exercise above is NOT?correct???

A

?The purchasing manager should be able to threaten to switch suppliers to get better?deals and address the adverse material price variance?

B

?The materials mix variance is entirely under the control of the production manager?

C

?The favourable yield variance in March could be the result of operational efficiency?

D

?The responsibility for the initial poor performance must be borne by both the?purchasing manager and the production manager?

?The following statements have been made in relation to the use of standard costs in rapidly?changing environments:?

(1) Variance analysis results will take into account important criteria such as customer?satisfaction or quality of production.?

(2) Achieving standards is suitable in most modern manufacturing environments.?

Which of the above statement(s) is/are true??

A

?(1) only?

B

?(2) only?

C

?Neither (1) nor (2)?

D

?Both (1) and (2)?

?The following statements have been made about planning and control as described in the?three tiers of Robert Anthony’ s decision-making hierarchy:?

(1) Strategic planning is concerned with making decisions about the efficient and?effective use of existing resources.?

(2) Operational control is about ensuring that specific tasks are carried out efficiently?and effectively.?

Which of the above statements is/are true??

A

?(1) only?

B

?(2) only?

C

?Neither (1) nor (2)?

D

?Both (1) and (2)?

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