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That is the inventory holding cost when the holding cost for one unit for a 1 if you were to use the ending inventory method? hat is the inventory holding cost if

That is the inventory holding cost when the holding cost for one unit for a 1 if you were to use the ending inventory method? hat is the inventory holding cost if

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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e. What are the overtime production costs? f. What is the inventory holding cost when the holding cost for one unit for a month is $1 if you were to use the ending inventory method? g. What is the inventory holding cost if you were to use the average inventory level method?
Transcribed Image Text:e. What are the overtime production costs? f. What is the inventory holding cost when the holding cost for one unit for a month is $1 if you were to use the ending inventory method? g. What is the inventory holding cost if you were to use the average inventory level method?
1. General Food Stuffs packages a variety of breakfast cereals and snack bars, which it aggregates as simply units of sale when doing medium-term planning.General Food Stuffs has created the following aggregate plan for the next 6 months: Month 1 Month 2 40,000 Month 3 20,000 Month 4 10,000 Month 5 Month 6 Forecast 20,000 5,000 20,000 (units of sale) Overall Production 30,000 45,000 5,000 15,000 0. 20,000 Ending Inventory Regular Time Production Overtime Production General Food Stuffs can produce up to 25,000 units of sale a month in regular time, when production costs are only $2.50 per unit of sale. When General Foods Stuffs plansto exceed 30,000 units of sale produced in a single month, all units of sale in excess of 30,000 must be produced in overtime production at a cost of $3.50 per unit of sale. General Food Stuffs actually has 5,000 units of sale available in inventory at the start ofmonth 1. a. What is the ending inventory for month 4 in this plan? b. What is the average inventory for month 3 in this plan? c. Logically, what is the total amount that General Food Stuffs plans to producein overtime production in this plan? d. What are the total regular production costs?
Transcribed Image Text:1. General Food Stuffs packages a variety of breakfast cereals and snack bars, which it aggregates as simply units of sale when doing medium-term planning.General Food Stuffs has created the following aggregate plan for the next 6 months: Month 1 Month 2 40,000 Month 3 20,000 Month 4 10,000 Month 5 Month 6 Forecast 20,000 5,000 20,000 (units of sale) Overall Production 30,000 45,000 5,000 15,000 0. 20,000 Ending Inventory Regular Time Production Overtime Production General Food Stuffs can produce up to 25,000 units of sale a month in regular time, when production costs are only $2.50 per unit of sale. When General Foods Stuffs plansto exceed 30,000 units of sale produced in a single month, all units of sale in excess of 30,000 must be produced in overtime production at a cost of $3.50 per unit of sale. General Food Stuffs actually has 5,000 units of sale available in inventory at the start ofmonth 1. a. What is the ending inventory for month 4 in this plan? b. What is the average inventory for month 3 in this plan? c. Logically, what is the total amount that General Food Stuffs plans to producein overtime production in this plan? d. What are the total regular production costs?
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