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A decision maker that makes decisions using the minimax regret criterion would be classified as:

• A. Risk seeking
• B. Risk spreading
• C. Risk averse
• D. Risk neutral

QR uses an activity based budgeting (ABB) system to budget product costs. It manufactures two products, product Q and product R. The budget details for these two products for the forthcoming period are as follows:

The total budgeted cost of setting up the machines is $74,400.
Select TWO potential benefits of using an activity based budgeting system.

• A. Activity based budgeting allows the ranking of activities and the determination of how limited resources should be allocated across competing activities.
• B. Activity based budgeting is useful for the review of quality systems utilization.
• C. Activity based budgeting allows the identification of value added and non-value added activity and ensures that any budget cuts are made to non-value added activities.
• D. Activity based budgeting provides a clear framework for understanding the link between turnover and the level of activity.

JRL manufactures two products from different combinations of the same resources. Unit selling prices and unit cost details for each product are as follows:

The optimal solution in the previous question shows that the shadow prices of skilled labour and direct material A are as follows:
Skilled labour $ Nil
Direct material A $11.70
Explain the relevance of these values to the management of JRL.
What is the additional contribution that can be earned?

• A. Thus the additional contribution that can be earned and therefore the penalty value at which WRX would decide not to supply the major customer order in full is $5, 825
• B. Thus the additional contribution that can be earned and therefore the penalty value at which WRX would decide not to supply the major customer order in full is $3, 825
• C. Thus the additional contribution that can be earned and therefore the penalty value at which WRX would decide not to supply the major customer order in full is $4, 570
• D. Thus the additional contribution that can be earned and therefore the penalty value at which WRX would decide not to supply the major customer order in full is $4, 825

A company produces trays of pre-prepared meals that are sold to restaurants and food retailers. Three varieties of meals are sold: economy, premium and deluxe.


Calculate, for the original budget, the budgeted fixed overhead costs, the budgeted variable overhead cost per tray and the budgeted total overheads costs.

• A. The variable cost per tray = $0.75; The fixed cost = $ 490 000
• B. The variable cost per tray = $0.45; The fixed cost = $ 320 000
• C. The variable cost per tray = $0.65; The fixed cost = $ 550 000
• D. The variable cost per tray = $0.85; The fixed cost = $ 530 000

Which TWO of the following statements are true for obtaining a reliable forecast from a time series?

• A. There must be a decreasing trend.
• B. There must be an increasing trend.
• C. The past pattern of seasonal variations must continue in the future.
• D. Extrapolation of the trend must be avoided.
• E. The past trend must continue in the future.