Play the role of a consultant. Write a consulting report that will mitigate senior managements? concern(i.e., dealing with the sales managers? reluctance to have their products produced at the new mill). At aminimum, your report should include the following:a. Calculated overhead rates for the new mill and the old mill, where overhead is assigned tocarpet based on normal yards of carpet per year.b. Calculated expected total cost for an example product (pick Carpet A4415) if the production runoccurred at the old vs. new mill.c. Put forth two or three new solutions that overcome the desire of the residential and commercialsales department managers to have their products produced in the old mill. Discuss the prosand cons of your solutions. Here, two really good solutions are better than two really good plusone not-so-good solution.

AC 561 Almost Weekly Assignment #2 SP16 Instructions & Rubric for: Georgia Carpet Mill (an individual assignment) [Visualization often helps. Check out https://www.youtube.com/watch?v=nLUavfC6KjM] Georgia Carpet Mill, Inc. is a premier worldwide carpet manufacturer with products for residential and commercial applications. Home sales and commercial sales each account for about 50 percent of total revenue. The company is organized into three departments: manufacturing (currently a single 'mill'), residential sales, and commercial sales. The full cost of each roll of carpet is transferred to the sales department that orders carpet. Each sales department is evaluated as a profit center. The current manufacturing plant (i.e., 'mill') is at capacity. A new mill, which is almost finished, will more than double the company's manufacturing ability. Management believes that the company's business can be grown such that excess capacity will be eliminated within two years. When the new mill becomes operational, one mill will exclusively produce commercial carpeting and the other mill will exclusively produce residential carpeting. The change will simplify scheduling, ordering, and inventory control at both mills. In addition, having a second mill will create economies of scale through longer production runs. (Again, it will take a few years for economies of scale can be realized.) Each mill produces carpeting in 12-foot-wide rolls of 100 yards in length. The output of each mill is measured in yards produced. Overhead is allocated to carpet rolls using carpet yards produced in the mill as a cost driver. The expected cost structure for each plant is as follows: Normal machine hours per year Normal carpet yards per hour Normal capacity Annual manufacturing overhead costs (excluding accounting depreciation) Accounting depreciation per year Old Mill 6,000 1,000 6 million yards New Mill 5,000 1,400 7 million yards $15,000,000 $21,000,000 $6,000,000 $21,000,000 In addition to being able to run at higher speeds (thus producing more yards of carpet per hour), the new mill will use 15% less direct material and direct labor because. (The new mill will have more automated machines that produce less scrap.) An example job-cost sheet run at the old mill is: Carpet A4415: (100-yard roll) Direct material $ 800 Direct labor $600 Total Direct Costs $1,400 Although the new mill has lower direct costs than the old mill, the higher overhead costs per yard at the mill have the sales department managers nervous. They are already lobbying senior management to AC 561 Almost Weekly Assignment #2 SP16 have the old mill assigned to produce their products. The commercial sales department manager argues, \"More of my customers are located closer to the old mill than are residential sales' customers. Therefore, to economize on transportation costs, my products should be produced in the old mill.\" The residential sales department manager counters with the following argument: \"Transportation costs are less than 1% of total revenues. The new mill should produce commercial products because we expect new commercial product to use more synthetic material and the latest technology at the new mill is better able to adapt to the new synthetics.\" Senior management is worried about how to deal with the two sales department managers' reluctance to have their products produced at the new mill. One suggestion has been for each mill to produce about half of commercial sales product and about half residential sales products. Owners of Georgia Carpet Mill consider this suggestion \"off limits\" because splitting production would eliminate most of the efficiencies and economies of scale that motivated the decision to build the second manufacturing plant. Each mill will be dedicated to one market segment (per the owner's decree). Requirement: Play the role of a consultant. Write a consulting report that will mitigate senior managements' concern (i.e., dealing with the sales managers' reluctance to have their products produced at the new mill). At a minimum, your report should include the following: a. Calculated overhead rates for the new mill and the old mill, where overhead is assigned to carpet based on normal yards of carpet per year. b. Calculated expected total cost for an example product (pick Carpet A4415) if the production run occurred at the old vs. new mill. c. Put forth two or three new solutions that overcome the desire of the residential and commercial sales department managers to have their products produced in the old mill. Discuss the pros and cons of your solutions. Here, two really good solutions are better than two really good plus one not-so-good solution. Report length: fewer than three full pages, double spaced (where two pages is better than three). Appendices (if needed) can be added. Grading Rubric: 25% following directions, 50% peer evaluation (where: clearly labeled numeric calculation is roughly the assessment and clarity/sensibility of the business solution is roughly the assessment), 25% 'helpfulness' and professionalism of your peer assessment. Due dates: upload your report to Blackboard before noon on February 2nd & bring a hard copy of your report to class (you will hand it in). The timing of peer assessment is provided in Blackboard. NOTE: This is a first attempt at using Blackboard's Peer Assessment feature. If the system fails to work properly, all reports will be assessed by me... but it will take a while