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O'brien Company: APP Trial and Error -- Chase Demand and Subcontracting Quarter Demand 1 3,300 10,200 2 3 8,700 $59,800 $39,200 Trial and Error is
O'brien Company: APP Trial and Error -- Chase Demand and Subcontracting Quarter Demand 1 3,300 10,200 2 3 8,700 $59,800 $39,200 Trial and Error is to be used to determine a production plan mixing Chase Demand with Subcontracting strategies. What are the total Hiring Costs for the production plan? $42,000 $36,400 $64,400 Regular Prod. Capacity = 7,500 units/qtr Subcontracting Capacity = 4,000 units/qtr Production rate/worker = 150 units/qtr Starting workforce Beginning Inventory = 50 = 0 O $69,000 Regular Prod. Cost = $8/unit Subcontract Prod. Cost = $14/unit = $5/unit/qtr = $1900/worker = $1400/worker Inventory Cost Firing Cost Hiring Cost
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