Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 220(00) bolts per month, except for the seventh month, when capacity will be 250(00) bolts. Regular output has a cost of $15 per hundred bolts. Workers can be assigned to other jobs if production is less than regular. The beginning inventory is zero bolts.

Month 1 2 3 4 5 6 7 Total
Forecast 180 190 210 225 245 260 270 1,580

a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Overtime is $33 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.)

b. Would the total cost be less with full regular production each period with no overtime, but using a subcontractor to handle the excess above regular capacity at a cost of $35 per hundred bolts? Backlogs are not allowed. The inventory carrying cost is $2 per hundred bolts. (Round your Average inventory values to 1 decimal place. Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

13th Edition

978-0073379616, 73379611, 978-0697789938

More Books

Students also viewed these Accounting questions