Question 1

A company's budget for the next period shows that it would breakeven at sales revenue of $800,000 and fixed costs of $320,000.

The sales revenue needed to achieve a profit of $200,000 in the next period would be:

Options :

A : $1,950,000

B : $1,780,000

C : $1,400,000

D : $1,300,000

E : $1,390,000

Answer: D

Question 2

THS produces two products from different combinations of the same resources. Details of the products are shown below:

Identify, using graphical linear programming, the optimal production plan for products E and R to maximize THS's profit in the month.

Options :

A : The solution (from the graph0 is to produce 675 units of E and 470 units of R.

B : The solution (from the graph0 is to produce 495 units of E and 670 units of R.

C : The solution (from the graph0 is to produce 475 units of E and 770 units of R.

D : The solution (from the graph0 is to produce 375 units of E and 750 units of R.

E : The solution (from the graph0 is to produce 375 units of E and 870 units of R.

F : The solution (from the graph0 is to produce 495 units of E and 470 units of R.

Answer: D

Question 3

Which TWO of the following statements are true for obtaining a reliable forecast from a time series?

Options :

A : There must be an increasing trend.

B : The past trend must continue in the future.

C : The past pattern of seasonal variations must continue in the future.

D : Extrapolation of the trend must be avoided.

E : There must be a decreasing trend.

Answer: B,C

Question 4

Two products being produced by a company require the same material which is limited to 2,600 kgs.

What is the optimal production plan?

Options :

A : 500 units of S & 100 units of T

B : 50 units of S & 400 units of T

C : 400 units of S & 167 units of T

D : 500 units of S & 400 units of T

Answer: A

Question 5

The standard production cost of making a product is as follows:

What is the fixed production overhead capacity variance?

Options :

A : $9,000F

B : $6,000F

C : $3,000F

D : $6,000A

Answer: B