Derive the optimum solution using a computer package

Assignment Help Managerial Accounting
Reference no: EM13180455

CRSL is concerned that new gaming legislation will be passed whereby spending limits will be placed on gamblers. If this is the case CRSL may restructure their business by reducing the number of poker machines and transforming a large part of the current gaming machine area into a venue where conferences can be held. This area will have 10 rooms with 3 levels of conferences experiences offered - deluxe, standard and basic which will be aimed specifically at corporate, community groups and clients. The rooms would be charged out at a daily rate. 

You are proposing that the deluxe service will see a conference room equipped with the latest technology including a café style coffee machine and the provision of all food (max of 20 people per room). The next service level is standard whereby morning and afternoon tea is provided with the option for attendees to eat at the restaurant (max. of 35 people per room). Lastly, the basic level of service offers only tea and coffee (max of 75 people per room).

The rooms are all the same size and the cost to clean each room is the same but depending on the type of service chosen by a client, other costs will differ. An estimated cost for a room according to each service type (deluxe, standard and basic) appears below with the budgeted cost limit.





Available Budget

Selling Price















Direct labour





Room Clean per day





Variable overhead





Due to limits on the number of guests who may have access to the building at any one time, a maximum of one room offering basic service can be utilised per day and a minimum of two rooms offering deluxe services.


a) Formulate a linear program to determine the expected mix of conference rooms to ensure the maximum profit for CRSL. Show all supporting calculations and derive the optimum solution using a computer package.

b) Comment on the solution, was it what you expected? Why or why not?

Reference no: EM13180455

What do we mean by a relevant range

MS6010- Compare fixed, variable, and mixed costs. What do we mean by a Relevant Range? A professional services business has fixed costs of €150,000 and variable costs of €15

Question on material quantity variance

The following materials standards have been established for a particular product: What is the materials quantity variance for the month?

Make in regard to pricing and production

Consider an American automaker like GM with production facilities in 50 countries and sales in almost 200 countries! To maximize profits, what decisions does GM have to make

What effect does the lease classification have

What effect does the lease classification have on A&Fs balance sheet and Over the life of the lease, what effect does this classification have on the company's net income?

What are the investments payback period and irr

What are the investment's payback period, IRR, and NPV, assuming the firm's WACC is 8% and if the firm requires a payback period of less than 5 years, should this project be a

Value of abandonment option

High Roller Properties is considering building a new casino at a cost of $10 million at t = 0. What is the value (in thousands) of this abandonment option?

Demonstrated its social and environmental accountability

Discuss the way in which BHP Billiton has demonstrated its social and environmental accountability and discuss the stance and initiatives of the Australian accounting profess

Compute the total cost of the two ending inventories

Deschamps Company's ending Goods in Process Inventory account consists of 5,000 units of partially completed product, and its Finished Goods Inventory account consists of 12,0


Write a Review

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd