The Barberton Municipal division of Road Maintenance is charged with road repair in the city of Barberton and the surrounding area. Vijay Gupta, road maintenance director, must submit a staffing plan for the next year based on a set schedule for repairs and on the city budget. Gupta estimates that the labor hours required for the next four quarters are 7,000, 13,000, 20,000, and 10,000, respectively. Each of the 11 workers on the workforce can contribu 500 hours per quarter. Payroll costs are $6,000 in wages per worker for regular time worked up to 500 hours, with a overtime pay rate of $20 for each overtime hour. Overtime is limited to 20 percent of the regular-time capacity in any quarter. Although unused overtime capacity has no cost, unused regular time is paid at $12 per hour. The cost of hiring a worker is $3,800, and the cost of laying off a worker is $1,200. Subcontracting is not permitted. (Hint: When calculating the number of workers, make sure to round up to the next whole number before proceeding with any further calculations.) a. Find a level workforce plan that relies just on overtime and the minimum amount of undertime possible. Overtime can be used to its limits in any quarter. What is the total cost of the plan? S (Enter your response as an integer.)
The Barberton Municipal division of Road Maintenance is charged with road repair in the city of Barberton and the surrounding area. Vijay Gupta, road maintenance director, must submit a staffing plan for the next year based on a set schedule for repairs and on the city budget. Gupta estimates that the labor hours required for the next four quarters are 7,000, 13,000, 20,000, and 10,000, respectively. Each of the 11 workers on the workforce can contribu 500 hours per quarter. Payroll costs are $6,000 in wages per worker for regular time worked up to 500 hours, with a overtime pay rate of $20 for each overtime hour. Overtime is limited to 20 percent of the regular-time capacity in any quarter. Although unused overtime capacity has no cost, unused regular time is paid at $12 per hour. The cost of hiring a worker is $3,800, and the cost of laying off a worker is $1,200. Subcontracting is not permitted. (Hint: When calculating the number of workers, make sure to round up to the next whole number before proceeding with any further calculations.) a. Find a level workforce plan that relies just on overtime and the minimum amount of undertime possible. Overtime can be used to its limits in any quarter. What is the total cost of the plan? S (Enter your response as an integer.)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
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Transcribed Image Text:The Barberton Municipal division of Road Maintenance is charged with road repair in the city of Barberton and the
surrounding area. Vijay Gupta, road maintenance director, must submit a staffing plan for the next year based on a
set schedule for repairs and on the city budget. Gupta estimates that the labor hours required for the next four
quarters are 7,000, 13,000, 20,000, and 10,000, respectively. Each of the 11 workers on the workforce can contribute
500 hours per quarter. Payroll costs are $6,000 in wages per worker for regular time worked up to 500 hours, with an
overtime pay rate of $20 for each overtime hour. Overtime is limited to 20 percent of the regular-time capacity in any
quarter. Although unused overtime capacity has no cost, unused regular time is paid at $12 per hour. The cost of
hiring a worker is $3,800, and the cost of laying off a worker is $1,200. Subcontracting is not permitted. (Hint: When
calculating the number of workers, make sure to round up to the next whole number before proceeding with any
further calculations.)
a. Find a level workforce plan that relies just on overtime and the minimum amount of undertime possible. Overtime
can be used to its limits in any quarter. What is the total cost of the plan? S (Enter your response as an integer.)
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