A Juarez, Mexico, manufacturer of roofing supplies has developed monthly forecasts for a family of products. Data for the 6-month period January to June are presented in the table below. There are 8 hours of production per day. This exercise only contains part a. a) The firm would like to begin development of an aggregate plan. For this plan, plan 5, the firm wishes to maintain a constant workforce of 6, using subcontracting to meet remaining demand. Evaluate this plan. To determine whether this plan is desirable, first calculate demand per day for each month (enter your responses rounded to the nearest whole number). Table 1 Avg Dem Per Prod. Day Inventory carrying cost Other data $8 per unit per month Production Demand Month Days Forecast Subcontracting cost per unit $12 per unit Average pay rate Overtime pay Rate $5 per hour ($40 per day) $7 per hour (above 8 hrs per day) 1.6 hrs per unit $300 per unit 1 January 22 950 2 February 18 750 3 March 21 750 Labor-hours per unit Cost of increasing daily production rate (hiring & training) Cost of decreasing daily production rate (layoffs) 4 April 21 1,000 5 May 6 June 22 1,300 20 1,050 $600 per unit The production rate per day units. (Enter your response as a whole number.) Fill in the table below. (Enter your responses as whole numbers.) Regular Production Subcontract Month Demand (Units) 1 January 950 2 February 750 3 March 750 4 April 1,000 5 May 6 June 1,300 1,050 The total regular production cost = $ (Enter your response as a whole number.) The total subcontracting cost = $| (Enter your response as a whole number.)
A Juarez, Mexico, manufacturer of roofing supplies has developed monthly forecasts for a family of products. Data for the 6-month period January to June are presented in the table below. There are 8 hours of production per day. This exercise only contains part a. a) The firm would like to begin development of an aggregate plan. For this plan, plan 5, the firm wishes to maintain a constant workforce of 6, using subcontracting to meet remaining demand. Evaluate this plan. To determine whether this plan is desirable, first calculate demand per day for each month (enter your responses rounded to the nearest whole number). Table 1 Avg Dem Per Prod. Day Inventory carrying cost Other data $8 per unit per month Production Demand Month Days Forecast Subcontracting cost per unit $12 per unit Average pay rate Overtime pay Rate $5 per hour ($40 per day) $7 per hour (above 8 hrs per day) 1.6 hrs per unit $300 per unit 1 January 22 950 2 February 18 750 3 March 21 750 Labor-hours per unit Cost of increasing daily production rate (hiring & training) Cost of decreasing daily production rate (layoffs) 4 April 21 1,000 5 May 6 June 22 1,300 20 1,050 $600 per unit The production rate per day units. (Enter your response as a whole number.) Fill in the table below. (Enter your responses as whole numbers.) Regular Production Subcontract Month Demand (Units) 1 January 950 2 February 750 3 March 750 4 April 1,000 5 May 6 June 1,300 1,050 The total regular production cost = $ (Enter your response as a whole number.) The total subcontracting cost = $| (Enter your response as a whole number.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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