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A snowboard manufacturer is considering investing in technology that will give a good indication of how heavy snowfall will be in the future. The predictions tend to be reasonably accurate.

The current budgeted profit for the year is £2,560,000 but if they invest in this technology and it works, the expected profit will be £2,640,000. The manufacturer is willing to invest a maximum of £40,000 into the venture.

What is the expected profit if the investment is NOT made?

Options:

£2,560,000

£2,640,000

£2,520,000

£2,600,000

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Question 2

A company sells two products, X and Y, which are always sold in the same ratio.

No inventories are held.

The following budgeted data relate to month 10:

What is the budgeted margin of safety in month 10?

Options:

600 units

5,400 units

1,000 units

5,000 units

Question 3

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:

500 units of S & 100 units of T

50 units of S & 400 units of T

400 units of S & 167 units of T

500 units of S & 400 units of T

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