Cost accounting: relevant cost FA is selling bean pupusas and pork pupusas on No
ID: 2517231 • Letter: C
Question
Cost accounting: relevant cost FA is selling bean pupusas and pork pupusas on November 12 for $42 for a batch of 21 pupusas. Greg, Alexia, and Canjie are doing all the cooking, and they will be using a friend's kitchen. Their only constraint is that they an't use more than 150 cups of rders for 10 batches of bean pupusas and 3S batches of pork pupusas. ALP masa flour, because that's all that fits in Greg's car. As of October 20, ALEAS Recipes Bean Pupusas (makes 21) Pork Pupusas (makes 21) Ingredient 3 cups beans 3 pounds cheese 4 cups masa flour Cost Cost $0.50 per cu $2 per pound S1 per cup Ingredient 3 pounds pork$4 per pound 3 pounds cheese 3 cups masa flour $2 per pound S1 per cup resa tried to order 8 batches of bean pupusas, and wanted to pay $40 per batch. Should ALPFA take her order? Show your quantitative analysis (4-step method and CFISes) and list at least two qualitative considerations the ALPFA group should think about when deciding. (No more than 30 words.)Explanation / Answer
Answer :
Current Situation : Oct 20 (Calculation in $)
Particulars Bean Pupusas (21 Pupusas) Pork Pupousas(21 Pupusas)
Selling Price p.u. 42 42
Variable cost
Beans 1.5 12
Cheese 6.0 6
Masa Flour 4.0 3
Total 11.5 21
Cotribution 30.5 21
So contribution per batch is more in Beans Pupusas as compare to Pork Pupusas.
They has an order from Theresa of 8 batch of Beans Papuas so ALPFA should take this order as conrtribution is more as compare to Pork Pupusas.
However, Masa Flour is a contraint so there will some contriburtion foregone if Thersa's order is accepted.
Total Units consumed currently of Masa Flour : 4*10 + 3*35 = 145
Totak cuos available = 150
Total cup required if Theresa order accepted = 4*10 + 3*35 + 4*8 = 177
Cups Short = 177 - 150 = 27 Cups short
So Units foregone of Pork = 27 cups/3 = units
Comtribution Foregone = 9 * 21 = 189