A Manager Has Prepared a Forecast of Expected Aggregate Demand $$\begin{array} { l l } \text { Month } & \text { Forecast } \\\hline 1 & 80 \\2 & 100 \\3 & 120 \\4 & 110 \\5 & 100 \\6 & 90\end{array}$$

question 51

Essay

A manager has prepared a forecast of expected aggregate demand for the next six months. Develop an aggregate plan to meet this demand given this additional information: A level production rate of 100 units per month will be used. Back orders are allowed, and they are charged at the rate of $8 per unit per month. Inventory holding costs are $1 per unit per month in ending inventory. Determine the cost of this plan if regular time cost is $20 per unit and beginning inventory is zero. $$\begin{array} { l l } \text { Month } & \text { Forecast } \\\hline 1 & 80 \\2 & 100 \\3 & 120 \\4 & 110 \\5 & 100 \\6 & 90\end{array}$$

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Definitions:

Journal Entries

Journal entries are the records of financial transactions in the accounting books, marking the initial step in the accounting cycle, detailing debits and credits.

Adjusted Trial Balance

An adjusted trial balance is a listing of all company accounts that will appear on the financial statements after year-end adjusting journal entries have been made.

Closing Entries

Journal entries made at the end of an accounting period to transfer balances from temporary accounts to permanent accounts, finalizing the books for the period.

Periodic Inventory System

An inventory accounting system where goods are physically counted at specific intervals to determine the cost of goods sold and ending inventory levels.