4) RESOURCE UTILIZATION DECISIONS & CONSTRAINS

a) False
b) False
c) True
d) True
e) True
4) RESOURCE UTILIZATION DECISIONS & CONSTRAINS

CORRECT STATEMENT
THE GOAL OF RESOURCE UTILISATION IS TO ALLOCATE MAXIMUM RESOURCES TO PRODUCT WHICH GIVES
LIMITED RESOURCE DOES NOT INCLUDE ONLY MONEY & RAW MATERIALS BUT ALSO MACHINE CAPACITY
DECISION MAKERS SHOULD ALSO CONSIDER QUALITATIVE FACTORS SUCH AS REPUTATION, MARKET DEM
INCREASING THE EFFICIENCY OF A NON-BOTTLENECK OPERATIONS IS AN EFFECTIVE WAY TO INCREASE T
POOR MANAGEMENT DECISIONS LEADS TO BOTTLENECK DECISIONS.
EXERCISE-16
COMPACT DISC 1
AVAILABLE MACHINE HOURS 100000
MACHINE TIME PER CD 2
TOTAL QUANTITY PRODUCED 50000
PER CD TOTAL
SELLING PRICE ₹ 500.00 ₹ 25,000,000.00
VARIABLE COST ₹ 100.00 ₹ 5,000,000.00
CONTRIBUTION MARGIN ₹ 400.00 ₹ 20,000,000.00
FIXED COST ₹ 240.00 ₹ 12,000,000.00
NET INCOME ₹ 160.00 ₹ 8,000,000.00

COMPACT DISC 2
AVAILABLE MACHINE HOURS 100000
MACHINE TIME PER CD 5
TOTAL QUANTITY PRODUCED 20000
PER CD TOTAL
SELLING PRICE ₹ 1,000.00 ₹ 20,000,000.00
VARIABLE COST ₹ 200.00 ₹ 4,000,000.00
CONTRIBUTION MARGIN ₹ 800.00 ₹ 16,000,000.00
FIXED COST ₹ 600.00 ₹ 12,000,000.00
NET INCOME ₹ 200.00 ₹ 4,000,000.00

COMPACT DISC 1 IS MORE PROFITABLE BECAUSE IT EARNS ADDITIONAL 40 LAKHS PROFIT WHEN IT COM

EXERCISE-17 QUEEN KING

TOTAL STUFFING HOURS PER YEAR 4000 4000
STUFFING HOUR PER MATTRESSES 1 3
MATTRESSES PRODUCED 4000 1333.3333333333

A)CONTRIBUTION MARGIN QUEEN PER UNITKING PER UNIT

SALES PRICE ₹ 26,250.00 ₹ 31,750.00
DIRECT MATERIAL ₹ 17,500.00 ₹ 18,250.00
DIRECT LABOR ₹ 3,750.00 ₹ 4,250.00
VARIABLE OVERHEAD ₹ 1,250.00 ₹ 1,750.00
TOTAL VARIABLE COST ₹ 22,500.00 ₹ 24,250.00
CONTRIBUTION MARGIN ₹ 3,750.00 ₹ 7,500.00
B) Assuming demand is not a constraint

Since the demand is not a constraint the company can produce 4,000 Units of Queen beds and 0 Units of King bed to earn m

EXERCISE-18 PIGSKIN ARTIFICIAL LEATHER

TOTAL STITCHING HOURS PER YEAR 3000 3000
STUFFING HOUR PER MATTRESSES 2 1
FOOTBALL PRODUCED 1500 3000
BATCH OF 10 FOOTBALL 150 300
A)CONTRIBUTION MARGIN PIGSKIN PER UNIARTIFICIAL LE
SALES PRICE ₹ 25,000.00 ₹ 12,500.00
DIRECT MATERIAL ₹ 7,500.00 ₹ 2,500.00
DIRECT LABOR ₹ 2,250.00 ₹ 2,000.00
VARIABLE OVERHEAD ₹ 1,500.00 ₹ 1,000.00
TOTAL VARIABLE COST ₹ 11,250.00 ₹ 5,500.00
CONTRIBUTION MARGIN ₹ 13,750.00 ₹ 7,000.00

B) Assuming demand is not a constraint

Since the demand for the product is not a constraint they should produce 3,000 units of artificial football and 0 units of Pigs
KHS PROFIT WHEN IT COMPARES WITH COMPACT DISC-2

1333

TOTAL QUEEN TOTAL KING

₹ 105,000,000.00 ₹ 42,322,750.00
₹ 70,000,000.00 ₹ 24,327,250.00
₹ 15,000,000.00 ₹ 5,665,250.00
₹ 5,000,000.00 ₹ 2,332,750.00
₹ 90,000,000.00 ₹ 32,325,250.00
₹ 15,000,000.00 ₹ 9,997,500.00

0 Units of King bed to earn maximum profit

FICIAL LEATHER

1333

TOTAL PIGSKIN TOTAL ARTIFICIAL LEATHER

 ₹ 3,750,000.00 ₹ 3,750,000.00
₹ 1,125,000.00 ₹ 750,000.00
₹ 337,500.00 ₹ 600,000.00
₹ 225,000.00 ₹ 300,000.00
₹ 1,687,500.00 ₹ 1,650,000.00
₹ 2,062,500.00 ₹ 2,100,000.00

al football and 0 units of Pigskin football with 3,000 Labour hours to achieve maximum Profit.