Chad Davis, vice president for operations at C&C Sports, is considering different strategies for managing the company$$s inventory. Earlier in the year, the company implemented a more systematic production schedule so that at the end of each month Finished Goods

Inventory is $25\%$ of the next month$$s anticipated sales. That strategy freed a lot of inventory space and improved the company$$s cash flow. However, Chad noticed that because of the seasonal nature of the purchases of all of the products, especially award jackets, the need for direct labor hours fluctuated widely from one month to the next. Even though Chad is able to hire workers as needed, he is concerned that eventually he won$$t be able to find skilled workers unless they are promised a more consistent schedule. For C&C Sports, labor and sewing machines are constrained resources. The company can produce as many of their products as they have

people to make them. Chad gathered the following unit sales and cost information about each product.

Sales price Pants $$19\mathrm{.}00$ Jerseys $$22\mathrm{.}00$ Jackets $$175\mathrm{.}00$

Direct materials Pants $$6\mathrm{.}00$ Jerseys $$10\mathrm{.}00$ Jackets $$58\mathrm{.}00$

Direct labor Pants $4\mathrm{.}00$ Jerseys $3\mathrm{.}20$ Jackets $24\mathrm{.}00$

Variable overhead Pants $2\mathrm{.}20$ Jerseys $1\mathrm{.}76$ Jackets $13\mathrm{.}20$

Fixed overhead Pants $2\mathrm{.}80$ Jerseys $2\mathrm{.}24$ Jackets $16\mathrm{.}80$

Total cost Pants $$15\mathrm{.}00$ Jerseys $$17\mathrm{.}20$ Jackets $$112\mathrm{.}00$

Gross profit Pants $$4\mathrm{.}00$ Jerseys $$4\mathrm{.}80$ Jackets $$63\mathrm{.}00$

Direct labor hours Pants $\mathrm{.}25$ Jerseys $\mathrm{.}20$ Jackets $1\mathrm{.}50$

below is the $2021$ sales forecast

Jan

pants $38,000$

jerseys $12,000$

jackets $0$

Feb

pants$20,000$

jerseys $9,000$

jackets $0$

Mar

pants $12,000$

jerseys $5,000$

jackets $0$

Apr

pants $12,000$

jerseys $4,000$

jackets $1,000$

May

pants $12,000$

jerseys $6,000$

jackets $5,000$

July

pants $8,000$

jerseys $2,000$

jackets $0$

June

pants $16,000$

jerseys $3,000$

jackets $3,000$

Aug

pants $6,000$

jerseys $2,000$

jackets $0$

Sep

pants $6,000$

jerseys $2,000$

jackets $0$

Oct

pants $10,000$

jerseys $4,000$

jackets $1,000$

Dec

pants $40,000$

jerseys $15,000$

jackets $3,000$

Nov

pants $20,000$

jerseys $6,000$

jackets $5,000$

Annual

pants $200,000$

jerseys $70,000$

jackets $18,000$ below is C&C Sports $20214$th Quarter Direct Labor Budget $-$ All Products

October

pants $3,125$

jerseys $900$

jackets $3,000$

Total direct labor hours required $7,025$

Standard average wage rate $16\mathrm{.}00$

Budgeted direct labor cost $ $112,400$

November

pants $6,250$

jerseys $1,650$

jackets $6,750$

Total direct labor hours required $14,650$

Standard average wage rate $16\mathrm{.}00$

Budgeted direct labor cost $ $234,400$

December

pants $9,875$

jerseys $2,850$

jackets $3,375$

Total direct labor hours required $16,100$

Standard average wage rate $16\mathrm{.}00$

Budgeted direct labor cost $$257,600$

$4$th Quarter

pants $19,250$

jerseys $5,400$

jackets $13,125$

Total direct labor hours required $37,775$

Standard average wage rate $16\mathrm{.}00$

Budgeted direct labor cost $604,400$

Claire Elliot, vice president for finance and administration, reminded him that a commission of $5\%$ of the sales price and shipping costs of $$0\mathrm{.}40$ per item should also be considered when analyzing different strategies. The contribution margin for pants $$5\mathrm{.}45$ Jerseys $5\mathrm{.}54$ Jackets $$70\mathrm{.}65($a$).$ Contribution margin per direct labor hour for pants $$21\mathrm{.}80$ jerseys $27\mathrm{.}70$ Jackets $47\mathrm{.}10($b$).$ If demand wasnt an issue the following order preference should given to producing $1.$ Jackets $2.$ Jerseys $3.$ pants $($c$).$ If the sales mix continues as budgeted in $2021200,000$ pants, $70,000$ jerseys, and $18,000$ jackets$-50000$ DLH will be neeeded to produce pants, $14,000$ DLH to produce Jerseys, and $27000$ DLH to produce jackets for a total of $91000$ DLH $($d$1).$If C&C Sports chose to spread out production evenly throughout the year, $1750$ direct labor hours would be required each week $($D$2),$ assuming the company operates all $52$ weeks per year. $44$ employees would be needed if operations ran two $8-$hour shifts per day, $5$ days per week $($e$1).$ How many sewing machines would be needed if operations ran two $8-$hour shifts per day, $5$ days per week? $($e$2)($Round answer to nearest whole numbers, e$.$g$.15.)$