Home For AAT student members AQ 2016 Professional Diploma in Accounting Management Accounting: Budgeting

Management accounting: Budgeting Practice Paper Question 5e

KAFKAF Registered, AAT Student Posts: 6
Hi,

Could someone help me to work out the without overtime maximum sales volume and the with unlimited overtime section please?


Comments

  • Pian32Pian32 MAAT Posts: 378
    As you've only showed part of the question I can't give you an answer.

    For the sales volume you need to look at how long a unit takes and do:
    Without overtime the lowest of:
    Total Labour hours available/hours for one unit
    or
    Sales demand

    With overtime the lowest of:
    Total machine hours available/machine hours for one unit
    Total material available/material for one unit
    Sales demand

    I'm assuming the 2nd constraint would be machine hours but I included all the possibilities.
    AAT Level 4, MAAT
    ACCA in progress
    F4- Passed Aug 2020
    F5- Passed Dec 2020
    F6- Passed Sep 2020
    F7- Planned June 2021
    F8
    F9 - Planned June 2021
  • KAFKAF Registered, AAT Student Posts: 6
    sorry i just realised i missed off the top bit.

    I've attached the full question now.


  • Pian32Pian32 MAAT Posts: 378
    Sufficient materials to manufacture = 4000 (6000/1.5)
    No overtime can manufacture = 3500 (700/(12/60)
    Sufficient machine time to manufacture = 3900 (130/(2/60)

    Without overtime, max vloume = 3,500 (limit is labour hours)
    With overtime max volume = 3,800 (limit is the demand)

    Just a case of looking at the constraints and picking the lowest. If overtime is allowed then labour is no longer a constraint and the next lowest is the level of demand.
    AAT Level 4, MAAT
    ACCA in progress
    F4- Passed Aug 2020
    F5- Passed Dec 2020
    F6- Passed Sep 2020
    F7- Planned June 2021
    F8
    F9 - Planned June 2021
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