Calculate the Total Cost to Meet the Demand Using a Level

question 89

Multiple Choice

Calculate the total cost to meet the demand using a level production plan with overtime. Once overtime is approved the workers are on the job 12 hours each day for the full period. Each unit that cannot be completed with a level product plan costs the firm $150. Assume that the employees can only finish a whole unit and round up/down accordingly.

• A) $72,960
• B) $73,460
• C) $75,870
• D) $76,800
• E) $77,175

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Definitions:

Work in Process

The costs of unfinished goods in the manufacturing process, including labor, raw materials, and overhead.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods during a specific period, including labor, material, and overhead costs, important for inventory valuation and income determination.

Manufacturing Costs

Expenses directly associated with the production of goods, including raw materials, labor, and overhead costs.

Inventory Accounts

Accounts used to track the quantity and value of goods a company has in stock, including raw materials, work-in-progress, and finished goods.