Calculate the aggregate production rate: The BackPack Company produces a line of backpacks. The manager, Tameka Nicholas, is interested in using a level aggregate plan.Inventories and back orders will be used to handle demand fluctuations. She has asked you to develop such a plan. Use the followingdata to solve the problem:Problem DataCost dataRegular-time labor cost per hour$12.00Overtime labor cost per hour$16.00Subcontracting cost per unit (labor only)$80.00Holding cost per unit per period$8.00Back-order cost per unit per period$15.00Hiring cost per employee$500.00Firing cost per employee$350.00Capacity dataBeginning workforce198 employeesBeginning inventory500 unitsLabor standard per unit6 hoursRegular time available per period170 hoursOvertime available per period Firing cost per employee$350.00Capacity dataBeginning workforce198 employeesBeginning inventory500 unitsLabor standard per unit6 hoursRegular time available per period170 hoursOvertime available per period30 hoursSubcontracting maximum per period1,000 unitsSubcontracting minimum per period500unitsDemand dataPeriod 15,500 unitsPeriod 24,700 unitsPeriod 37,700 unitsPeriod 45,700 unitsPeriod 56,600 unitsPeriod 6 3.900units

Cost Accounting refers to the accounting which helps in calculating the cost of the product &…

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Calculate the aggregate production rate:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Calculate the aggregate production rate:

The BackPack Company produces a line of backpacks. The manager, Tameka Nicholas, is interested in using a level aggregate plan.
Inventories and back orders will be used to handle demand fluctuations. She has asked you to develop such a plan. Use the following
data to solve the problem:
Problem Data
Cost data
Regular-time labor cost per hour
$12.00
Overtime labor cost per hour
$16.00
Subcontracting cost per unit (labor only)
$80.00
Holding cost per unit per period
$8.00
Back-order cost per unit per period
$15.00
Hiring cost per employee
$500.00
Firing cost per employee
$350.00
Capacity data
Beginning workforce
198 employees
Beginning inventory
500 units
Labor standard per unit
6 hours
Regular time available per period
170 hours
Overtime available per period

Firing cost per employee
$350.00
Capacity data
Beginning workforce
198 employees
Beginning inventory
500 units
Labor standard per unit
6 hours
Regular time available per period
170 hours
Overtime available per period
30 hours
Subcontracting maximum per period
1,000 units
Subcontracting minimum per period
500units
Demand data
Period 1
5,500 units
Period 2
4,700 units
Period 3
7,700 units
Period 4
5,700 units
Period 5
6,600 units
Period 6 3.900units

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