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Demand Regular Production Subcontract Production Ending Inventory

Demand Regular Production Subcontract Production Ending Inventory

FINANCIAL ACCOUNTING
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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Overtime or Subcontract Month Demand Regular Production Jan Feb. March April May June Total 0 0 0 d. Determine the cost of the chase production plan. Total cost if workforce size adjusted Total cost if overtime production used Total cost if subcontracting used Overtime or Subcontract Production Answer is not complete. Ending Inventory 0 Workers Required (4,000 cases/worker) Hire 0 Fire layoff 0
Transcribed Image Text:Overtime or Subcontract Month Demand Regular Production Jan Feb. March April May June Total 0 0 0 d. Determine the cost of the chase production plan. Total cost if workforce size adjusted Total cost if overtime production used Total cost if subcontracting used Overtime or Subcontract Production Answer is not complete. Ending Inventory 0 Workers Required (4,000 cases/worker) Hire 0 Fire layoff 0
Month January February March April May June Total Demand Average Monthly Demand: TABLE 13-4 Soda Galore Planning Data Current workforce 6 workers Average monthly output per worker 4,000 cases per month Inventory holding cost $ 0.80 per case per month $36.00 per hour Regular wage rate Regular production hours/month/worker 250 hours Overtime wage rate Hiring cost $ 54.00 per hour $1,000 per worker 3.20 per case Subcontracting cost $ $ 1,500 per worker Firing/layoff cost Beginning inventory 4,000 (all safety stock) Assume that employees negotiate an increase in the regular production wage rate to $40 per hour and $60 per hour for overtime Assume Soda Galore always plans to hold at least 4.000 cases of safety stock to meet unanticipated customer demand. Also assume that hiring and layoff/firing, if necessary, occur at the beginning of the month. a. Using the planning information and the newly negotiated wage rates, develop a six-month production plan based on level production. (Leave no cells blank - be certain to enter "0" wherever required.) Act Demand Forecast 16,000 cases 24,000 cases 32,000 cases 32,000 cases 24,000 cases 136,000 cases 264,000 cases 44,000 cases
Transcribed Image Text:Month January February March April May June Total Demand Average Monthly Demand: TABLE 13-4 Soda Galore Planning Data Current workforce 6 workers Average monthly output per worker 4,000 cases per month Inventory holding cost $ 0.80 per case per month $36.00 per hour Regular wage rate Regular production hours/month/worker 250 hours Overtime wage rate Hiring cost $ 54.00 per hour $1,000 per worker 3.20 per case Subcontracting cost $ $ 1,500 per worker Firing/layoff cost Beginning inventory 4,000 (all safety stock) Assume that employees negotiate an increase in the regular production wage rate to $40 per hour and $60 per hour for overtime Assume Soda Galore always plans to hold at least 4.000 cases of safety stock to meet unanticipated customer demand. Also assume that hiring and layoff/firing, if necessary, occur at the beginning of the month. a. Using the planning information and the newly negotiated wage rates, develop a six-month production plan based on level production. (Leave no cells blank - be certain to enter "0" wherever required.) Act Demand Forecast 16,000 cases 24,000 cases 32,000 cases 32,000 cases 24,000 cases 136,000 cases 264,000 cases 44,000 cases
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