The S&OP team at Kansas Fumiture, led by David Angelow, has received estimates of demand requirements as shown in the table. Assuming one-sime stockout costs for lost sales of $100 per unit inventory carrying costs of $30 per unit per month, and zero beginning and ending inventory, evaluate these two plans on an incremental cost basis: Plan A: Produce at a steady rate (equal to minimum requirements) of 1,200 units per month and subcontract additional units at a $70 per unit premium cost. Subcontracting capacity is limited to 500 units per month. (Enter all responses as whole numbers) 1 July 2 August 3 September 4 October 5 November 6 December Month Month 1 July 2 August 3 September 4 October 5 November 6 December Demand 1200 1300 Demand 1200 1300 1200 1700 1650 1650 1200 1700 1650 1650 Ending Production Inventory 1,200 0 0 0 1,200 1,200 1,200 1,200 1,200 The total cost, excluding normal time labor costs, for Plan A-$105000 (Enter your response as a whole number) Plan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs is $60 per unit out back (Enter all responses as whole numbers) Note: Both hiring and layoff costs are incurred in the month of the change (le, going from production of 1,300 in July to 1200 in August requires a leyoff (and related costs) of 100 units in August) 0 0 Hire Production (Units) 0 Subcontract (Units) 0 100 0 500 450 450 Layoff Ending (Units) Inventory Stockouts (Units)
The S&OP team at Kansas Fumiture, led by David Angelow, has received estimates of demand requirements as shown in the table. Assuming one-sime stockout costs for lost sales of $100 per unit inventory carrying costs of $30 per unit per month, and zero beginning and ending inventory, evaluate these two plans on an incremental cost basis: Plan A: Produce at a steady rate (equal to minimum requirements) of 1,200 units per month and subcontract additional units at a $70 per unit premium cost. Subcontracting capacity is limited to 500 units per month. (Enter all responses as whole numbers) 1 July 2 August 3 September 4 October 5 November 6 December Month Month 1 July 2 August 3 September 4 October 5 November 6 December Demand 1200 1300 Demand 1200 1300 1200 1700 1650 1650 1200 1700 1650 1650 Ending Production Inventory 1,200 0 0 0 1,200 1,200 1,200 1,200 1,200 The total cost, excluding normal time labor costs, for Plan A-$105000 (Enter your response as a whole number) Plan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs is $60 per unit out back (Enter all responses as whole numbers) Note: Both hiring and layoff costs are incurred in the month of the change (le, going from production of 1,300 in July to 1200 in August requires a leyoff (and related costs) of 100 units in August) 0 0 Hire Production (Units) 0 Subcontract (Units) 0 100 0 500 450 450 Layoff Ending (Units) Inventory Stockouts (Units)
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 18M
Related questions
Question
Please answer fast I will rate for you sure......
![The S&OP team at Kansas Fumiture, led by David Angelow, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $100 per unit,
inventory carrying costs of $30 per unit per month, and zero beginning and ending inventory, evaluate these two plans on an incremental cost basis:
Plan A: Produce at a steady rate (equal to minimum requirements) of 1,200 units per month and subcontract additional units at a $70 per unit premium cost. Subcontracting capacity is limited to 500
units per month. (Enter all responses as whole numbers)
1
July
2 August
3 September
4 October
5 November
December
6
Month
Month
1 July
2 August
3 September
4
October
5 November
6
December
Demand
1200
1200
1700
1300
1200
1700
1650
1650
The total cost, excluding normal time labor costs, for Plan A-$ 105000 (Enter your response as a whole number)
Plan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs is $60 per unit
cut back. (Enter all responses as whole numbers)
Note: Both hiring and layoff costs are incurred in the month of the change (le, going from production of 1,300 in July to 1200 in August requires a layoff (and related costs) of 100 units in August).
Hire
Layoff
(Units) (Units)
Stockouts
(Units)
Demand Production
1200
1300
1650
1650
Ending
Production Inventory
1,200
0
1,200
0
1,200
0
1,200
0
1,200
0
1,200
0
Subcontract
(Units)
0
100
0
500
450
450
Ending
Inventory](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd0a3c19f-0ecb-43ef-8f62-48070c8bcd56%2Fcf089f8f-7c62-43ac-928e-2d072c7a7b40%2Fdtv6qd6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The S&OP team at Kansas Fumiture, led by David Angelow, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $100 per unit,
inventory carrying costs of $30 per unit per month, and zero beginning and ending inventory, evaluate these two plans on an incremental cost basis:
Plan A: Produce at a steady rate (equal to minimum requirements) of 1,200 units per month and subcontract additional units at a $70 per unit premium cost. Subcontracting capacity is limited to 500
units per month. (Enter all responses as whole numbers)
1
July
2 August
3 September
4 October
5 November
December
6
Month
Month
1 July
2 August
3 September
4
October
5 November
6
December
Demand
1200
1200
1700
1300
1200
1700
1650
1650
The total cost, excluding normal time labor costs, for Plan A-$ 105000 (Enter your response as a whole number)
Plan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs is $60 per unit
cut back. (Enter all responses as whole numbers)
Note: Both hiring and layoff costs are incurred in the month of the change (le, going from production of 1,300 in July to 1200 in August requires a layoff (and related costs) of 100 units in August).
Hire
Layoff
(Units) (Units)
Stockouts
(Units)
Demand Production
1200
1300
1650
1650
Ending
Production Inventory
1,200
0
1,200
0
1,200
0
1,200
0
1,200
0
1,200
0
Subcontract
(Units)
0
100
0
500
450
450
Ending
Inventory
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
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 2 steps with 4 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
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
![Excel Applications for Accounting Principles](https://www.bartleby.com/isbn_cover_images/9781111581565/9781111581565_smallCoverImage.gif)
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
![Excel Applications for Accounting Principles](https://www.bartleby.com/isbn_cover_images/9781111581565/9781111581565_smallCoverImage.gif)
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning