Jupiter Australasia Ltd hasrecently acquired the Kiewa Milk Co in north-east Victoria and you have
been seconded there as part of yourmanagement accounting graduate role. The CEOof Kiewa
Milk Co has mentioned the term ‘production constraint’ to you on a number of occasions and
you are unsure what she is referring to. You decide to conduct your own research (which goes
beyond the text) to find out what a ‘constraint’ is in a manufacturing environment.
Required:
Discuss the notion of production capacity in a manufacturing environment. Your answer
should discussthe different meanings oftheoretical capacity and practical capacity asthey are
applied inmanufacturing firms.
Describe some of the constraints which may impact on the productive capacity of a
manufacturing company. In your answer also address the ‘relevant range’ concept as it is applied
inmanagement accounting andasitrelatesto capacity constraints(300-450words).
Please ensure that you properly reference allsources(including websites) and avoid simply
cutting andpasting.