Limiting factors??

megs-1984

Hi
Please help I'm stuck on limiting factors, I cant seam to get the idea of how to work them out there has to be a simple way to remember??

Many thanks
Megs

SandyHood

Try this link
http://www.aat.org.uk/forums/showthread.php?t=16411

As always try to think about examples in your own working life

1. You might have a phone call to do the tax returns for a local football team. You know each will generate £70 and take on average 3.5 hours
   
2. You could also have a one off chance to do accounts for a local firm that will earn you £140 and take 14 hours
   
3. And a chance to deliver advertising leaflets for 6 hours at £6.00 per hour

Now lets say you only have 35 hours available

The accounts would be the biggest earner but we need to look at the hourly rates so your 35 hours are used to their best

The tax returns earn you £70/3.5 hrs = £20 per hour on average
The accounts earn you £140/14 hrs = £10 per hour
The leaflet delivery earns £6.00 per hour

So we have a rank (or list of preferences)

The choice is to do as many tax returns as possible for the football team

1. If it was possible to do 10 then that would be it, 10 x 3.5 hrs = the 35 hrs available, and no time would be left for the accounts or the leaflet delivery.
2. If only 6 footballers want tax return then 6 x 3.5 = 21 hrs leaving 14 hrs for the second choice (the accounts) and no time for leaflets

Can you relate to such decisions (and does it make it something that is real rather than a topic to learn to pass the exam)?

megs-1984

Hi thanks this really makes sence now, thanks for your help