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 100 workers on January 31. You are given the following demand forecast: February, 80,256; March, 70,400; April, 100,360; May, 40,360. Productivity is four units per worker hour, eight hours per day, 22 days per month. Assume zero inventory on February 1. Costs are: hiring, $45 per new worker, layoff, $65 per worker laid off, inventory holding, $10 per unit-month; regular time labor, $10 per hour, overtime, $15 per hour, backorder, $20 per unit.

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 100 workers on January 31. You are given the following demand forecast: February, 80,256; March, 70,400; April, 100,360; May, 40,360. Productivity is four units per worker hour, eight hours per day, 22 days per month. Assume zero inventory on February 1. Costs are: hiring, $45 per new worker, layoff, $65 per worker laid off, inventory holding, $10 per unit-month; regular time labor, $10 per hour, overtime, $15 per hour, backorder, $20 per unit.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 23Q: If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of...

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Manager Chris Channing of Fabric Mills, Inc., has developed the forecast shown in the table for bolts of cloth. The figures are in hundreds of bolts. The department has a regular output capacity of 195(00) bolts per month, except for the seventh month, when capacity will be 210(00) bolts. Regular output has a cost of $9 per hundred bolts. Workers can be assigned to other jobs if production is less than regular. The beginning inventory is zero bolts. Month Forecast Period Forecast Output Regular Overtime Output-Forecast Cost 200 Regular Overtime Total 189 210- a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Overtime is $19 per hundred bolts. Regular production can be less than regular capacity (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.). 194 200 2 5 212 189 195 210 4 215 194 Total 1,415 5 212 6 195 215 Total 1,415
If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of capacity the next month, will a different cost per unit be charged to the work-in-process account each month for factory overhead assuming that a predetermined annual overhead rate is used?
Assume that sales and expenses forecasts for months April, May, June, and July are as follows. month, 60% are paid in the next month, and 20% are paid in the second month after. All expenses in a month are paid in the same month. There is a $20,000,000 minimum required cash balance at the end of each month, and any shortage from this minimum requirement will be covered by obtaining a loan. Any excess over $20,000,000 will be used to reduce or pay off cumulative loan. Initial cash balance in June is $6,000,000 and there is no cumulative loan at this time. Monthly prorated tax rate is 2%, and monthly interest rate on cumulative loan is 1%. Requirements: Prepare cash budget proforma for months June and July and interpret the result in detail.
using the Optimal order quantity of 1812 how many weeks are there between each optimal order quantity? the cost of placing an order is $513 and the annual holding coat rate of 14%. the lead time is 2weeks the company only pays for goods when the shipment arrives to the distribution center. assume there are 48 weeks in a year.
A producer of chairs is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have fixed costs of $10000 per month and a variable costs of $1.50 per unit produced. Each item is sold to the retailers at a price that averages $2.10 per unit. a. What volume per month is required to break even? b. What profit would be realized on a monthly volume of 65000 units? c. What volume is needed to obtain a profit of $15000 per month? d. What volume is needed to provide a revenue of $23000 per month
Perennial Company, a manufacturer of decorative pots, expects sales of 500,000 pots at $10 each during the coming year. Variable manufacturing costs are $4 per unit and fixed manufacturing costs are $2.50 per unit. The company received a special order from an overseas customer to purchase 50,000 pots at $6 each. The company has sufficient plant capacity to manufacture this order. However, additional overtime labor costs of $1.00 per pot would be required to produce the pots. No other costs would be incurred as a result of accepting the order. If the special order is accepted, how will operating profit be impacted?
Can someone help me figure out this problem ? Pretty Lady Cosmetic Products has an average production process time of 40 days. Finished goods are kept on hand for an average of 15 days before they are sold. Accounts receivable are outstanding an average of 35 days, and the firm receives 40 days of credit on its purchases from suppliers. Estimate the average length of the firm's short-term operating cycle. How often would the cycle turn over in a year? A. 90 days and 4.06 times B. 80 days and 4.06 times C. 70 days and 3.06 times D. 90 days and 3.06 times
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Find a constant workforce plan for the eight months and the total cost of the plan, if backorders are permitted. You may hire or fire workers only at the beginning of January. What is the cost of this plan?
Exercise 4 (Direct Labor Budget) The Production Department of the Laguna Plant óf JC Corporation has. submitted the following forecast of units to be produced at the plant for each quarter of the upcoming fiscal year. The plant produces high-end outdoor barbeque grills. 1s' quarter 5,000 2nd quarter 4,400 3rd quarter 4;500 4th quarter 4,900 Units to be produced Each unit requires 0.40 direct labor-hours and direct labor-hour workers paid P11 per hour. Required: 1. Construct the company's direct labor budget for the upcoming fiscal year, · assuming that the direct labor work force is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. 2. Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor work force is not adjusted each quarter.
Assume that sales and expenses forecasts for months April, May, June, and July are as follows. 20% of all sales in a month are paid in the same month, 60% are paid in the next month, and 20% are paid in the second month after. All expenses in a month are paid in the same month. There is a $20,000,000 minimum required cash balance at the end of each month, and any shortage from this minimum requirement will be covered by obtaining a loan. Any excess over $20,000,000 will be used to reduce or pay off cumulative loan. Initial cash balance in June is $6,000,000 and there is no cumulative loan at this time. Monthly prorated tax rate is 2%, and monthly interest rate on cumulative loan is 1%. Requirements: Prepare cash budget proforma for months June and July. Provide in-text citations and references, and explain your work in detail.
Carlos Cavalas, the manager of Echo Products' Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 68,420 units during the year, but by September 30 only the following activity had been reported: Inventory, January 1 Production Sales Inventory, September 30 Units 0 72,100 62,200 9,900 The division can rent warehouse space to store up to 30,800 units. The minimum inventory level that the division should carry is 1,600 units. Mr. Cavalas is aware that production must be at least 5,940 units per quarter in order to retain a nucleus of key employees. Maximum production capacity is 44,900 units per quarter. Demand has been soft, and the sales forecast for the last quarter is only 20,900 units. Due to the nature of the division's operations, fixed manufacturing overhead is a major element of product cost.