Given the Following Calculate (A) Cost Using a Level Production

question 76

Multiple Choice

Given the following calculate (a) cost using a level production plan, (b) cost using a chase aggregate plan, and identify the lowest cost option. In the level production plan backorders are allowed but for each unfilled order it costs the company $10/unit. The employees work an 8 hour day and overtime is not allowed

• A) A=5834, B = 5472, C = level
• B) A=5472, B = 5834, C = level
• C) A=5834, B = 5472, C = chase
• D) A=5472, B = 5834, C = chase
• E) A =5834, B = 5472, C = either

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Definitions:

Credit Sales

Transactions where goods or services are sold and payment is deferred to a future date, typically involving the issuance of an invoice.

COGS

COGS, or Cost of Goods Sold, represents the direct costs attributable to the production of the goods sold by a company, including material and labor costs.

Payables Turnover Rate

An efficiency ratio that measures how quickly a company pays off its suppliers, calculated as cost of goods sold divided by average accounts payable.

Accounts Payable Balance

The total amount of short-term liabilities or obligations a company owes to its creditors or suppliers.