Answer:
Total expenditure= $3,870
Explanation:
Based on the provided data:
predetermined overhead rate= $5.50
For Job A477:
Total direct labor hours: 100
Direct materials cost: $520
Direct labor expenses: $2,800
Now we calculate the overhead allocation:
Allocated manufacturing overhead= Estimated overhead rate * Actual base amount
Allocated manufacturing overhead= 5.50*100= $550
Then, we can compute the total job cost:
Total expense= 520 + 2,800 + 550= $3,870
A) For the first half of the year, the monthly demand averages to 560 / 6 = 93.33
Order size for the first six months can be calculated using: Sqrt(2 x A x O / C)
Where:
O is the cost of placing an order
C is the carrying cost per order
= Sqrt(2 x 93.33 x 55 / 2) = 71.65, rounded to 72
For the second half of the year, the monthly demand is 900 / 6 = 150
Order size for the second six months:
= Sqrt(2 x A x O / C)
= Sqrt(2 x 150 x 55 / 2)
= 90.83 or 91
B) For the first six months: Total monthly cost = (Q/2) x H + (d/Q) x S= (72 / 2) x 2 + (93.33 / 72) x 5 = $143.30 With a $10 discount, S = $ 55 - $10 = $ 45
Monthly TC at Q = 50 = (50/2) x 2 + (93.33 / 50)x 45 = $134.0 Monthly TC at Q = 100 = (100/2) x 2 + (93.33 / 100) x 45 = $142.00
Monthly TC at Q = 150 = (150/2) x 2 + (93.33 / 150) x 45 = $178.00
C)
Indeed, the manager should take advantage of this proposal and order Q = 50 units for the first six months. For the second six months, d = monthly demand = 900 / 6
= 150,
H = $2.00 for each unit monthly, S = $55, & EOQ = 91.
Calculating Monthly TC (Q = 91):
= (91/2) x 2 + (150/91) x 55
= $181.66
Monthly TC (Q = 50):= (50/2)x2 + (150/50)x 45= $185 Monthly TC (Q = 100) = (100/2) x 2 + (150/100) x 45= $167.50
Monthly TC (Q = 150)= (150/2) x 2 + (150/150) x 45= $195
