1. If Bodin Company plans to sell 480,000 units during the year, compute the number of units the firm would have to manufacture
during the year. Hilton, Ronald. Managerial Accounting: Creating Value in a Dynamic Business Environment (p. 405). McGraw-Hill Higher Education. Kindle Edition.
2 answers:
Answer:
A.
Bodin will have to manufacture 450,000 units and procure materials of 910units (if it plans to sell 480,000 units in the year)
B.
If it plans to sell 500,000 units however, it will have to produce additional stock of 470,000 units and procure materials of 950,000 units.
Explanation:
Production planning is a key requirement during the budget process
It works side by side with the sales budget. It is intended to fulfill the projected demand the business is positioning itself for in the period being reviewed.
It considers all levels of production needs in achieving each unit of production. Raw material, labour, conversion costs etc.
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Answer:
Explanation:
United States is producing 200 tons of hamburgers and 60 tons of tacos.
United States' opportunity cost for producing 1 ton of hamburgers
=
= 0.3
United States' opportunity cost for producing 60 tons of tacos.
=
= 3.33
So we see that US has a lower opportunity cost in producing hamburgers, so it has a comparative advantage in producing hamburgers.
Mexico is producing 40 tons of hamburgers and 50 tons of tacos.
Mexico's opportunity cost of producing a ton of hamburgers
=
= 1.25
Mexico's opportunity cost of producing a ton of tacos
=
= 0.8
So we see that Mexico has a lower opportunity cost in producing tacos, so it has a comparative advantage in making tacos.
Since US specializes in making hamburgers, it will produce 200 tons of hamburgers and 0 tons of tacos.
Mexico specializes in making tacos, it will produce 50 tons of tacos and 0 tons of hamburgers.