Question 1

Section A

SteelForge Manufacturing is preparing its functional budgets. The sales director confirms demand for 50,000 units. The factory has a maximum capacity of 40,000 machine hours. Each unit requires 1 machine hour. Raw materials are abundant. What is the principal budget factor for SteelForge?

Accepted Answer

Identify the factor that restricts the organization from achieving its maximum potential. Compare required resources for sales demand against available resources.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Assuming sales demand is always the principal budget factor.

Section A

SteelForge Manufacturing is preparing its functional budgets. The sales director confirms demand for 50,000 units. The factory has a maximum capacity of 40,000 machine hours. Each unit requires 1 machine hour. Raw materials are abundant. What is the principal budget factor for SteelForge?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 3

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