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#1 (38 Marks) We Suit U Best clothing Company produces designer pants and shirts which are made in small batches. Each year, during the summer,
#1 (38 Marks) We Suit U Best clothing Company produces designer pants and shirts which are made in small batches. Each year, during the summer, the company plans for their new fashions/designs to come out the following Spring. Both pants and shirts are made on the same fabrication equipment that is expected to operate at capacity. Therefore, the equipment must be switched over to a new design and set up to prepare for the production of each new batch of products. Pants and shirts are made to order, so when production batches are completed, they are shipped immediately to their wholesaler. The shipping costs vary with the number of shipments. Budgeted information for the year is as follows: Direct Materials-Pants Direct Materials Shirts Direct Labour-Pants Direct Labour Shirts Setup costs Shipping costs Design costs Plant Utities Other Budget Information Budged production in units Hours of Production Number of Ratches 475,000 650,000 950,000 325,000 750,000 125,000 250,000 450,800 3.975,800 Pants Shirts Total 4,750 3.250 5,000 5,500 3,700 9.200 300 350 250
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