A company has sales that are constant throughout the year. Production levels are maintained at the same volume as sales each month, so inventory holdings are close to nil. The company has identified that labour will be a limiting factor over the next two months due to summer holidays. How will this affect sales?
A. Sales will fall
B. Sales will increase
C. Sales will be unaffected
D. Sales may vary
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During the year XYZ Co can sell 100,000 units of product Z. Each unit requires 0.75kg of raw materials of which 97,000kg are available. Each unit also requires 0.5 labour hours of which 30,000 are available.What is the limiting factor?
A. Sales
B. Raw materials
C. Labour
D. No limiting factor
Which of the following are relevant or irrelevant costs for a project?Inventory which would otherwise be scrapped
A. Relevant cost
B. Irrelevant cost
Employees taken on especially for the project
A. Relevant cost
B. Irrelevant cost
ABC Co has some spare capacity and decides to make a batch of product Y. Product Y requires a raw material which ABC Co has in inventory, but will not be replaced. What is the relevant cost of the raw material if it has no resale value?
A. Past purchase cost
B. Current purchase cost
C. Percentage of Product Y sale price
D. Nil