b. Would the total cost be less with full regular production each period with no overtime, but using a subcontractor to handle theexcess above regular capacity at a cost of $23 per hundred bolts? Backlogs are not allowed. The inventory carrying cost is $2 perhundred 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.)PeriodForecastOutputRegularSubcontractingInventoryBeginningEndingAverageCostRegularSubcontractingInventoryTotal20018921019452126195Total215 1.415 Manager Chris Channing of Fabric Mills, Inc., has developed the forecast shown in the table for bolts of cloth. The figures are inhundreds of bolts. The department has a regular output capacity of 195(00) bolts per month, except for the seventh month, whencapacity will be 210(00) bolts. Regular output has a cost of $9 per hundred bolts. Workers can be assigned to other jobs if productionis less than regular. The beginning inventory is zero bolts.MonthForecastPeriodForecastOutputRegularOvertimeOutput-ForecastCost200RegularOvertimeTotal189210-a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Overtime is $19 per hundred bolts. Regularproduction can be less than regular capacity (Negative amounts should be indicated by a minus sign. Leave no cells blank - becertain to enter "0" wherever required.).194200252121891952104215194Total1,41552126195215Total1,415

a. Develop a chase plan that matches the forecast and compute the total cost of your plan Overtime is $19 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.)

a. Develop a chase plan that matches the forecast and compute the total cost of your plan Overtime is $19 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.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Suppose Iron City manufactures cast iron skillets. One model is a 10-inch skillet that sells for $20. Iron City projects sales of 500 10-inch skillets per month. The production costs are $9 per skillet for direct materials, $1 per skillet for direct labor, and $2 per skillet for manufacturing overhead. Iron City has 50 10-inch skillets in inventory at the beginning of July but wants to have an ending inventory equal to 20% of the next month’s sales. Selling and administrative expenses for this product line are $1,500 per month. Compute the total amount budgeted for product costs for July. $6,000 $6,500 $6,600 $7,200
Suppose Iron City manufactures cast iron skillets. One model is a 10-inch skillet that sells for $20. Iron City projects sales of 500 10-inch skillets per month. The production costs are $9 per skillet for direct materials, $1 per skillet for direct labor, and $2 per skillet for manufacturing overhead. Iron City has 50 10-inch skillets in inventory at the beginning of July but wants to have an ending inventory equal to 20% of the next month’s sales. Selling and administrative expenses for this product line are $1,500 per month. Compute the total amount budgeted for product costs for July. a. $6,000 b. $6,500 c. $6,600 d. $7,200
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