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 fo March will be held constant through May. However, government constraints put a maximur of 5,000 hours of overtime labor per month in April and May (zero overtime in February an 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 Ending backorders Workers hired Workers laid off February 81,000 0 81,000 27,000 110 22,000 0 0 22,000 -59,000 59,000 0 March 66,000 -59,000 66,000 22,000 110 22,000 0 0 22,000 -103,000 44,000 0 0 April 102,000 -103,000 102,000 34,000 110 22,000 4,000 26,000 -179,000 -179,000 76,000 60 0 May 42,000 -17,900 42,000 14,000 110 22,000 0 0 22,000 -199,000 20,000 0 0
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 fo March will be held constant through May. However, government constraints put a maximur of 5,000 hours of overtime labor per month in April and May (zero overtime in February an 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 Ending backorders Workers hired Workers laid off February 81,000 0 81,000 27,000 110 22,000 0 0 22,000 -59,000 59,000 0 March 66,000 -59,000 66,000 22,000 110 22,000 0 0 22,000 -103,000 44,000 0 0 April 102,000 -103,000 102,000 34,000 110 22,000 4,000 26,000 -179,000 -179,000 76,000 60 0 May 42,000 -17,900 42,000 14,000 110 22,000 0 0 22,000 -199,000 20,000 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please don't give image format and fast answering
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 fo
March will be held constant through May. However, government constraints put a maximur
of 5,000 hours of overtime labor per month in April and May (zero overtime in February an
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
Ending backorders
Workers hired
Workers laid off
February
81,000
0
81,000
27,000
110
22,000
0
0
22,000
-59,000
59,000
0
March
66,000
-59,000
66,000
22,000
110
22,000
0
0
22,000
-103,000
44,000
0
0
April
102,000
-103,000
102,000
34,000
110
22,000
4,000
26,000
-179,000
-179,000
76,000
60
0
May
42,000
-17,900
42,000
14,000
110
22,000
0
0
22,000
-199,000
20,000
0
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
Knowledge Booster
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
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education