Question1) The forecast for financial year 2013/2014 shows there would be a important increase in number of conferences that Boutique Catering would need to prepare meals for. The general manager is concerned that she would need to double the staff numbers to allow for such an increase. She has mentioned that because of the learning curve phenomenon it would be too difficult to accurately budget for the expected increase.
Required:
a) Describe to General Manager what the learning curve is? In your description make reference to two variant methods. Include in your response the conditions under which a learning curve can be used to assist in forecasting for future operations.
Question2) Boutique Catering is considering expanding business structure by preparing frozen meals that would be home-delivered. The meals would then only require to be heated up by the customer. As a point of difference the meals would be cooked according to the CSIRO total wellbeing recipe book. Meals Boutique Catering would offer are ‘everyday’, ‘vegetarian’ and ‘speciality’ meals (for people who have allergies). To prepare and cook meals Boutique Catering is looking at purchasing Frozen Delights which already has the capital equipment to prepare the three types of meals. Frozen Delights provides supermarkets with frozen meals and has spare capacity to supply Boutique Catering with frozen meals as well as maintain its present customer base. In the table below is an estimation of the cost and hours required to prepare, cook and freeze the meals and hours available to supply Boutique Catering with the meals.
Cost per meal Preparation (hours) Cooking (hours) Freezing (hours)
HOURS
REQUIRED
Everyday meals $8.00 4 8 3
Vegetarian meals $9.00 10 3 2
Speciality meals $12.00 8 8 2
HOURS AVALIABLE 800 1200 1000
Required
a) Using solver derive the optimal solutions for how many meals must be prepared to maximize profit.
b) State the optimum meal mix and the resulting profit
c) Describe to the General Manager what transfer pricing is and what are two methods that could be used to set the price between divisions?
Question3) The decision making process is a series of steps or stages that we work through to make the choice from the array of alternatives. Making decisions is an significant role that management accountants need to undertake in their position. Describe the utility curve with reference to the three perceptions of risk. Which of these best explains your attitude toward risk? In your role as a management accountant describe how your choice may affect your decision-making process and behavior.