Wiedmer Corporation Is Preparing an Aggregate Production Plan for Widgets

question 31

Multiple Choice

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months.The company's expected monthly demand is given in the following chart.The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month.Following is other critical data: Production cost per unit = $50
Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300
Firing cost per worker = $200 Beginning number of workers = 16
Each worker can produce = 50 units per month.LEVEL PLAN
What is the total cost of the level plan?

• A)$250,000
• B)$260,700
• C)$252,700
• D)$258,000

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Definitions:

Periodic Net Income

The profit or loss reported by a company at the end of a specific accounting period, reflecting all revenues and expenses.

Trading Securities

Financial assets that a company buys and sells with the intention of making a profit in the short term.

Debt Securities

Notes and bond investments that provide interest revenue over a fixed maturity.

Equity Securities

The common and preferred stock of a firm.