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Deforrest Marine Motors manufactures engines for the speedboat racing circuit. As part of their annual planning cycle, they forecasted demand for the next four quarters. The number of available days of production and the anticipated demand are given below. Employees Production Rate Production Cost Backorder Cryt Overtime Cost Overtime Limit 6,019,200 Demand They also estimated many of the costs required to conduct operations planning Some of these key figures are listed below. Question 4 Question 5 Q1 2,400 $1,000/unit $200 $1,500 30 70 units/employee/quarter 25% of Reg. Production Q2 2,200 Q3 1,700 Hire Cost Fire Cost Subcontracting Cost Subcontracting Limit Inventory Cost Initial Inventory Deforrest Marine Motors wishes to maintain the current number of employees for the entire year to follow a level strategy balanced with inventory and backorders as needed. What is the total cost of this plan? Q4 1,800 $1,200/employee $800/employee $1,800/unit 400 units maximum $100/unit/quarter 280 units If management at Deforrest Marine Motors is interested in a chase strategy using a hire/fire option, what is the total cost of this plan? They plan on using a policy where if the need were for 21.2 workers, they would hire 22 workers for that quarter. (Hint: this will impact regular time production and inventory) If management at Deforrest Marine Motors is interested in a level strategy with their current employees using overtime and subcontracting when demand cannot be balanced with inventory, what is the total cost of this plan?

Deforrest Marine Motors manufactures engines for the speedboat racing circuit. As part of their annual planning cycle, they forecasted demand for the next four quarters. The number of available days of production and the anticipated demand are given below. Employees Production Rate Production Cost Backorder Cryt Overtime Cost Overtime Limit 6,019,200 Demand They also estimated many of the costs required to conduct operations planning Some of these key figures are listed below. Question 4 Question 5 Q1 2,400 $1,000/unit $200 $1,500 30 70 units/employee/quarter 25% of Reg. Production Q2 2,200 Q3 1,700 Hire Cost Fire Cost Subcontracting Cost Subcontracting Limit Inventory Cost Initial Inventory Deforrest Marine Motors wishes to maintain the current number of employees for the entire year to follow a level strategy balanced with inventory and backorders as needed. What is the total cost of this plan? Q4 1,800 $1,200/employee $800/employee $1,800/unit 400 units maximum $100/unit/quarter 280 units If management at Deforrest Marine Motors is interested in a chase strategy using a hire/fire option, what is the total cost of this plan? They plan on using a policy where if the need were for 21.2 workers, they would hire 22 workers for that quarter. (Hint: this will impact regular time production and inventory) If management at Deforrest Marine Motors is interested in a level strategy with their current employees using overtime and subcontracting when demand cannot be balanced with inventory, what is the total cost of this plan?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Deforrest Marine Motors manufactures engines for the speedboat racing circuit. As part of their annual planning cycle, they forecasted demand for the next four quarters. The number of available days of production and the anticipated demand are glven below. Q1 Q2 Q3 Q4 Demand 2.400 2,200 1,700 1,800 They also estimated many of the costs required to conduct operations planning Some of these key figures are listed below, Employees Production Rate Production Cost Backorder Cryt Overtime Cost Overtime Limit Hire Cost Fire Cost Subcontracting Cost Subcontracting Limit Inventory Cost Initial Inventory $1.200/employee $800/employee $1,800/unit 400 units maximum $100/unit/quarter 280 units 30 70 units/employee/quarter $1,000/unit $200 $1,500 = 25% of Reg. Production Deforrest Marine Motors wishes to maintain the current number of employees for the entire year to followa level strategy balanced with inventory and backorders as needed. What is the total cost of this plan? 6,019.200 Question 4 If management at Deforrest Marine Motors is interested in a chase strategy using a hire/fire option, what is the total cost of this plan? They plan on using a policy where if the need were for 21.2 workers, they would hire 22 workers for that quarter. (Hint: this will impact regular time production and inventory.) Question 5 If management at Detorrest Marine Motors is interested in a level strategy with their current employees using overtime and subcontracting when demand cannot be balanced with inventory, what is the total cost of this plan?
Transcribed Image Text:Deforrest Marine Motors manufactures engines for the speedboat racing circuit. As part of their annual planning cycle, they forecasted demand for the next four quarters. The number of available days of production and the anticipated demand are glven below. Q1 Q2 Q3 Q4 Demand 2.400 2,200 1,700 1,800 They also estimated many of the costs required to conduct operations planning Some of these key figures are listed below, Employees Production Rate Production Cost Backorder Cryt Overtime Cost Overtime Limit Hire Cost Fire Cost Subcontracting Cost Subcontracting Limit Inventory Cost Initial Inventory $1.200/employee $800/employee $1,800/unit 400 units maximum $100/unit/quarter 280 units 30 70 units/employee/quarter $1,000/unit $200 $1,500 = 25% of Reg. Production Deforrest Marine Motors wishes to maintain the current number of employees for the entire year to followa level strategy balanced with inventory and backorders as needed. What is the total cost of this plan? 6,019.200 Question 4 If management at Deforrest Marine Motors is interested in a chase strategy using a hire/fire option, what is the total cost of this plan? They plan on using a policy where if the need were for 21.2 workers, they would hire 22 workers for that quarter. (Hint: this will impact regular time production and inventory.) Question 5 If management at Detorrest Marine Motors is interested in a level strategy with their current employees using overtime and subcontracting when demand cannot be balanced with inventory, what is the total cost of this plan?
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