A manufacturer of solid state drives (SSDs) has projected the next six months of demand...
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Accounting
A manufacturer of solid state drives (SSDs) has projected the next six months of demand to be as shown the table below:
Supply/Demand Info
Beginning
Jan
Feb
Mar
Apr
May
Jun
Forecast (demand)
51,200
48,000
54,200
60,600
48,600
54,400
Regular production
Overtime production
Subcontract production
Ending inventory
5,000
Hired employees
Fired employees
Total employees
180
Cost variables are as follows:
Cost Variables
Labor cost/hour
$20
Overtime cost/unit
$31
Subcontracting cost/unit
$26
Holding cost/unit/month
$9
Hiring cost/employee
$3,100
Firing cost/employee
$5,300
Here is some additional relevant (capacity) information:
Capacity Information
Total labor hours/SSD
2
Regular production units/employee/month
200
Max regular production/month
53,000
Max overtime production/month
3,400
Max subcontractor production/month
4,600
Assuming the company ONLY uses overtime and/or subcontract production if regular production capacity is not sufficient, answer the following questions: What is the regular production cost (over the six months from January through June) for a CHASE production plan? (Display your answer to the nearest whole number.)
What is the total overtime production cost for this production plan? (Display your answer to the nearest whole number.)
What is the total subcontract cost for this production plan? (Display your answer to the nearest whole number.)
What is the total holding cost for this production plan? (Display your answer to the nearest whole number.)
What is the total hire cost for this production plan? (Display your answer to the nearest whole number.)
What is the total fire cost for this production plan? (Display your answer to the nearest whole number.)
What is the total cost (sum of all costs) for this production plan? (Display your answer to the nearest whole number.)
Answer & Explanation
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