​Unidyde Corporation Is Currently Planning the Production of Red Dye

question 19

Essay

​Unidyde Corporation is currently planning the production of red dye number 56 for the next four months. Production and handling costs, as well as production and storage capacity, vary from month to month. This data is given in the table below.
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Production and holding costs are in ($1,000's per batch) and production levels and storage capacities are in batches. Holding costs are based on inventory on hand at the end of the month. The number of orders for batches the sales department has received over the four-month period are also given.
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Unidyne does not wish to have any inventory of the dye at the end of May. Its current inventory is 2 batches. Determine a production schedule for the next four months.
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Definitions:

First Processing Department

The initial stage or department in a manufacturing process where raw materials are first transformed or processed.

Units Started And Completed

Refers to the number of units of a product that begin and finish the manufacturing process within a specific time period.

Process Costing

A costing method used for homogenous products, allocating costs based on the processes or departments through which goods are manufactured.

Work in Process Inventory

Inventory that includes materials and labor that are currently in the process of being manufactured into finished goods.