Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 110 workers on January 31. You are given the following demand forecast: February, 81,000; March, 66,000; April, 102,000; May, 42,000. Productivity is three units per worker hour, eight hours per day, 25 days per month. Assume zero inventory on February 1. Costs are: hiring. $51 per new worker; layoff, $71 per worker laid off; inventory holding, $8 per unit-month; regular time labor, $8 per hour; overtime, $12 per hour, backorder, $16 per unit. Develop a production plan and calculate the total cost of this plan. Note: Assume any layoffs occur at beginning of next month. (Leave the cells blank, whenever zero (0) is required. Negative values should be indicated by a minus sign. Round your answers to the nearest whole number.) Forecast Beginning inventory Production required Production hours required Regular workforce Regular production Overtime hours Overtime production Total production Ending inventory February 81,000 March 66,000 April 102,000 May 42,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Aa 30.

Plan production for a four-month period: February through May. For February and March, you should produce to exact demand
forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers
needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime
labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are
110 workers on January 31. You are given the following demand forecast: February, 81,000; March, 66,000; April, 102,000; May, 42,000.
Productivity is three units per worker hour, eight hours per day, 25 days per month. Assume zero inventory on February 1. Costs are:
hiring. $51 per new worker; layoff, $71 per worker laid off; inventory holding, $8 per unit-month; regular time labor, $8 per hour,
overtime, $12 per hour, backorder, $16 per unit.
Develop a production plan and calculate the total cost of this plan. Note: Assume any layoffs occur at beginning of next month. (Leave
the cells blank, whenever zero (0) is required. Negative values should be indicated by a minus sign. Round your answers to the
nearest whole number.)
Forecast
Beginning inventory
Production required
Production hours required
Regular workforce
Regular production
Overtime hours
Overtime production
Total production
Ending inventory
February
81,000
March
66,000
April
102,000
May
42,000
Transcribed Image Text:Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 110 workers on January 31. You are given the following demand forecast: February, 81,000; March, 66,000; April, 102,000; May, 42,000. Productivity is three units per worker hour, eight hours per day, 25 days per month. Assume zero inventory on February 1. Costs are: hiring. $51 per new worker; layoff, $71 per worker laid off; inventory holding, $8 per unit-month; regular time labor, $8 per hour, overtime, $12 per hour, backorder, $16 per unit. Develop a production plan and calculate the total cost of this plan. Note: Assume any layoffs occur at beginning of next month. (Leave the cells blank, whenever zero (0) is required. Negative values should be indicated by a minus sign. Round your answers to the nearest whole number.) Forecast Beginning inventory Production required Production hours required Regular workforce Regular production Overtime hours Overtime production Total production Ending inventory February 81,000 March 66,000 April 102,000 May 42,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Strengths and Weaknesses
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education