ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.31 : In a biochemical engineering company, let the actual revenue generated = A, actual cost incurred = B. According to the standard budget, the revenue generated = C, cost incurred = D. (a) Find the profit according to : (i) actual situation; (ii) standard budget. (b) Calculate the Variance Due to Price and Efficiency in : (i) revenue generated; (ii) cost incurred; (iii) profit. (c) If E > F where > represents : more than, find the 4 pairs of values of E and F in favorable conditions.
ACCOUNTING AND FINANCIAL ENGINEERING - ANSWER 34.31 : (a)(i) actual profit = A - B; (ii) budgeted profit = C - D; (b)(i) revenue variance = A - C or C - A; (ii) cost variance = B - D or D - B; (iii) profit variance = (A - B) - (C - D) = A + D - B - C or (C - D) - (A - B) = C + B - D - A. (c) Favorable conditions will generate more profits according to actual situation, then A > B, C > D, A > C, D > B. The paired values of E - F are : A - B, C - D, A - C, D - B. The answer is given by Kang Chuen Tat; PO Box 6263, Dandenong, Victoria VIC 3175, Australia; SMS +61405421706; chuentat@hotmail.com; http://kangchuentat.wordpress.com.
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NATURAL GAS ENGINEERING - QUESTION 26.1 : (a) In natural gas pipe sizing, the length of the pipe from the gas source metre to the farthest appliances is 60 feet. The maximum capacities for typical metallic pipes of 60 feet in length are : 66 cubic feet per hour for pipe size of 0.5 inches; 138 cubic feet per hour for pipe size of 0.75 inches; 260 cubic feet per hour for pipe size of 1 inch. By using the longest run method : (i) Find the best pipe size needed for the capacity of 75 cubic feet per hour. (ii) Estimate the suitable range of capacities for the pipe size of 1 inch. (b) The maximum capacities for typical metallic pipes of 50 feet in length are : 73 cubic feet per hour for pipe size of 0.5 inches; 151 cubic feet per hour for pipe size of 0.75 inches; 285 cubic feet per hour for pipe size of 1 inch. By using the branch method find the best pipe size needed for the capacity of 75 cubic feet per hour when the length of the pipe from the gas source metre to the appliance is 52 feet.
ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.5 : In an American style option for share market, 2 persons - A and B agree to the following : B is required to sell 100 shares of IBMS to A for $85 per share anytime that A wants in the next 8 months. A will pay B $2 per share up front, non-refundable for this option. IBMS involves in petrochemical processing. IBMS stock is currently selling for $80 per share. (a) If A did not buy the share of IBMS from B after 8 months, how much will B earn? (b) If the share of IBMS goes up to $100 / share in 6 months later : (i) how much should A pay B for 100 shares according to their optional agreement? (ii) how much will A earn from 100 shares purchased from B when all the 100 shares are sold to the open market? (iii) how much net profit will A earn for selling 100 shares to the open market?
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