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I have worked through the majority of this problem but need help still, how can I determine the undertime cost adn the level prodcution rate?
I have worked through the majority of this problem but need help still, how can I determine the undertime cost adn the level prodcution rate?
Current inventory is 80 units. Current capacity is 860 units per month. The average salary of production workers is $1,300 per month. Material costs $130/ unit. Each production worker accounts for 15 units per month. Overtime is paid at time and a half. Any increase or decrease in the production rate costs $65/ unit for tooling, setup, and line changes. This does not apply, however, to overtime. Inventory-holding costs are $26 per unit per month. Lost sales are valued at $80 per unit. Compare the costs of level and chase demand production plans using the Agg Plan - Level and Agg Plan - Chase Excel templates. Round all your answers for cost values to the nearest cent and all other answers to the nearest whole number. Do not round intermediate calculations. If your answer is zero, enter " 0 ". Level production plan: \begin{tabular}{r|r|} \hline Production cost (\$/unit) & $216.67 \\ \cline { 2 - 2 } Inventory holding cost (\$/unit/month) & $26.00 \\ \( { } } \) & $80.00 \\ Overtime cost (\$/unit) & $260.00 \\ Undertime cost (\$/unit) & \\ Rate change cost (\$/unit) & $65.00 \\ Normal production rate (units) & 860 \\ Ending inventory (previous Dec.) & 80 \\ \hline Level Production Rate & \\ \hline \end{tabular} Current inventory is 80 units. Current capacity is 860 units per month. The average salary of production workers is $1,300 per month. Material costs $130/ unit. Each production worker accounts for 15 units per month. Overtime is paid at time and a half. Any increase or decrease in the production rate costs $65/ unit for tooling, setup, and line changes. This does not apply, however, to overtime. Inventory-holding costs are $26 per unit per month. Lost sales are valued at $80 per unit. Compare the costs of level and chase demand production plans using the Agg Plan - Level and Agg Plan - Chase Excel templates. Round all your answers for cost values to the nearest cent and all other answers to the nearest whole number. Do not round intermediate calculations. If your answer is zero, enter " 0 ". Level production plan: \begin{tabular}{r|r|} \hline Production cost (\$/unit) & $216.67 \\ \cline { 2 - 2 } Inventory holding cost (\$/unit/month) & $26.00 \\ \( { } } \) & $80.00 \\ Overtime cost (\$/unit) & $260.00 \\ Undertime cost (\$/unit) & \\ Rate change cost (\$/unit) & $65.00 \\ Normal production rate (units) & 860 \\ Ending inventory (previous Dec.) & 80 \\ \hline Level Production Rate & \\ \hline \end{tabular}Step by Step Solution
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