Appliances Inc. is preparing an aggregate production plan for washers for the next four months. The company's expected monthlydemand is given below in the chart. The company will have 650 washers in inventory at the beginning of the month and desires tomaintain at least that number at the end of each month. Assume hiring and layoff/firing, if necessary, occur at the beginning of themonth. Below is other critical data:Production cost per unit = $360Inventory carrying cost per month per unit = $50 (based on ending month inventory)Hiring cost per worker = $1,000Firing cost per worker = $2,000Beginning number of workers = 10a Click here for the Excel Data FileEach worker can produce 100 units per month.a. Given the planning information, develop a level production plan and a chase production plan. (Leave no cells blank - be certain toenter "O" wherever required.) Chase Plan - Variable WorkforceRegularProductionEndingInventoryMonthDemandWorkersHireFireRequired2,2004,40033,00044,400Total14,000b. Determine the cost of the two plans.Total cost for level planTotal cost for chase plan

Name: Appliances Inc. is preparing an aggregate production plan for washers
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Description: Appliances Inc. is preparing an aggregate production plan for washers for the next four months. The company's expected monthlydemand is given below in the chart. The company will have 650 washers in inventory at the beginning of the month and desire

Production plan: Production plan involves planning related to proper allocation of employees,…

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Appliances Inc. is preparing an aggregate production plan for washers for the next four months. The company's expected monthly demand is given below in the chart. The company will have 650 washers in inventory at the beginning of the month and desires to maintain at least that number at the end of each month. Assume hiring and layoff/firing, if necessary, occur at the beginning of the month. Below is other critical data: Production cost per unit = $360 Inventory carrying cost per month per unit $50 (based on ending month inventory) cost per worker = $1,000 Firing cost per worker = $2,000 Beginning number of workers = 10 Click here for the Excel Data File Each worker can produce 100 units per month.

Appliances Inc. is preparing an aggregate production plan for washers for the next four months. The company's expected monthly demand is given below in the chart. The company will have 650 washers in inventory at the beginning of the month and desires to maintain at least that number at the end of each month. Assume hiring and layoff/firing, if necessary, occur at the beginning of the month. Below is other critical data: Production cost per unit = $360 Inventory carrying cost per month per unit $50 (based on ending month inventory) cost per worker = $1,000 Firing cost per worker = $2,000 Beginning number of workers = 10 Click here for the Excel Data File Each worker can produce 100 units per month.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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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Question

Appliances Inc. is preparing an aggregate production plan for washers for the next four months. The company's expected monthly
demand is given below in the chart. The company will have 650 washers in inventory at the beginning of the month and desires to
maintain at least that number at the end of each month. Assume hiring and layoff/firing, if necessary, occur at the beginning of the
month. Below is other critical data:
Production cost per unit = $360
Inventory carrying cost per month per unit = $50 (based on ending month inventory)
Hiring cost per worker = $1,000
Firing cost per worker = $2,000
Beginning number of workers = 10
a Click here for the Excel Data File
Each worker can produce 100 units per month.
a. Given the planning information, develop a level production plan and a chase production plan. (Leave no cells blank - be certain to
enter "O" wherever required.)

Chase Plan - Variable Workforce
Regular
Production
Ending
Inventory
Month
Demand
Workers
Hire
Fire
Required
2,200
4,400
3
3,000
4
4,400
Total
14,000
b. Determine the cost of the two plans.
Total cost for level plan
Total cost for chase plan

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