Totes lab 5

Version T.O.T.E.S. CASE STUDY Each grocery bag requires 1/4 yard of 60 wide fabric and 1-1/2 yards of webbing. The Webbing costs Sb per yard. Thread is purchased in MATERIALS fabric costs $ 3.9 per yard. Webing costs s 6 per yard. Thread is purchased in 500-yard spools and is considered an indirect material. After the totes pass quality control they are silk-screened with a customer's logo and the T.O.T.E.S. label is attached. Both the silk-screen paint and the labels are indirect materials MANUFACTURING OVERHEAD T.O.T.E.S. allocates manufacturing overhead using a plantwide overhead rate based on machine hours in the cutting department. The cutting machines operate 95% of the hours worked by the cutting department employees. The plant operates 50 weeks per year INVENTORY T.O.T.E.S. operates on a just-in-time basis in regards to both raw materials and finished goods. Work-in-process inventory is negligible at the end of each month. The company has found that it needs to have 15% of the following month's production requirements on hand at th end ofeach month in order to meet sales projections. They plan to have 5% of the fabric and 10% of the webbing required for the following month's production on hand at the end of each month. SALES FORECAST In the upcoming year, T.O.T.E.S. management forecasted sales of 600,000 totes. Each tote sells for s 15h Tara estimated annual revenue and expenses based on that level of sales and production. Her estimates are shown on Exhibit 1-A