DO NOT ROUND ANY NUMBERS FOR THIS.Assume you can produce a fractional number of units, hold a fractional number of units in inventory, and run backlogs that include fractional units.I suggest you use excel for this homework. Question 9NowJuice, Inc. produces bottled pickle juice. A planner has developed anaggregate forecast for demand (in cases) for the next four months. Use thefollowing information to develop an aggregate plan using the LEVELstrategy. Inventory holding cost is $1 per month per case and backlog costis $5 per month per case. Beginning inventory is zero.Month May June July AugustForecast 493 580 601 762Cost Per UnitMonthly CapacityRegular Production15.30400Overtime Production1.5 x Regular Prod Cost400What is the total cost of holding inventory over the planning horizon usinga LEVEL plan? Question 10NowJuice, Inc. produces bottled pickle juice. A planner has developed anaggregate forecast for demand (in cases) for the next four months. Use thefollowing information to develop an aggregate plan using the LEVELstrategy. Inventory holding cost is $1 per month per case and backlog costis $5 per month per case. Beginning inventory is zero.Month May June July AugustForecast 454 590 601 745Cost Per UnitMonthly CapacityRegular ProductionOvertime Production13.004001.5 x Regular Prod Cost400What is the TOTAL cost of the LEVEL plan over the planning horizon?

Answered: Question 9 NowJuice, Inc. produces…

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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DO NOT ROUND ANY NUMBERS FOR THIS.

Assume you can produce a fractional number of units, hold a fractional number of units in inventory, and run backlogs that include fractional units.

I suggest you use excel for this homework.

Question 9
NowJuice, Inc. produces bottled pickle juice. A planner has developed an
aggregate forecast for demand (in cases) for the next four months. Use the
following information to develop an aggregate plan using the LEVEL
strategy. Inventory holding cost is $1 per month per case and backlog cost
is $5 per month per case. Beginning inventory is zero.
Month May June July August
Forecast 493 580 601 762
Cost Per Unit
Monthly Capacity
Regular Production
15.30
400
Overtime Production
1.5 x Regular Prod Cost
400
What is the total cost of holding inventory over the planning horizon using
a LEVEL plan?

Question 10
NowJuice, Inc. produces bottled pickle juice. A planner has developed an
aggregate forecast for demand (in cases) for the next four months. Use the
following information to develop an aggregate plan using the LEVEL
strategy. Inventory holding cost is $1 per month per case and backlog cost
is $5 per month per case. Beginning inventory is zero.
Month May June July August
Forecast 454 590 601 745
Cost Per Unit
Monthly Capacity
Regular Production
Overtime Production
13.00
400
1.5 x Regular Prod Cost
400
What is the TOTAL cost of the LEVEL plan over the planning horizon?

Expert Solution

Step 1

Cost per Unit

To establish prices high enough to make a profit, cost per unit information is required. The variable expenses and fixed costs incurred by a production process are divided by the number of units produced to determine the cost per unit.

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