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Operations Management
Slip, Inc. had a production run of 8,000 pairs of slippers during the last week of October, at the following costs per pair: Materials $500 Labor 400 FOH (includes 70 allowance for spoiled work) 300 Total 1,200 Final inspection revealed that 600 pairs do not meet quality standards and can be sold as seconds at $400 a pair. If spoilage is the result of internal failure, what is the cost of each pair of slippers? a. $987 b. $1,298.15 c. $1,189.19 d. $1,200 If spoilage is the result of change in design imposed by the customer, what is the cost of each pair of slippers? a. $987 b. $1,298.15 c. $1,189.19 d. $1,200

Slip, Inc. had a production run of 8,000 pairs of slippers during the last week of October, at the following costs per pair: Materials $500 Labor 400 FOH (includes 70 allowance for spoiled work) 300 Total 1,200 Final inspection revealed that 600 pairs do not meet quality standards and can be sold as seconds at $400 a pair. If spoilage is the result of internal failure, what is the cost of each pair of slippers? a. $987 b. $1,298.15 c. $1,189.19 d. $1,200 If spoilage is the result of change in design imposed by the customer, what is the cost of each pair of slippers? a. $987 b. $1,298.15 c. $1,189.19 d. $1,200

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Slip, Inc. had a production run of 8,000 pairs of slippers during the last week of October, at the following costs per pair:

Materials

$500

Labor

400

FOH (includes 70 allowance for spoiled work)

300

Total

1,200

Final inspection revealed that 600 pairs do not meet quality standards and can be sold as seconds at $400 a pair.

  1. If spoilage is the result of internal failure, what is the cost of each pair of slippers?
    a. $987
    b. $1,298.15
    c. $1,189.19
    d. $1,200
  2. If spoilage is the result of change in design imposed by the customer, what is the cost of each pair of slippers?
    a. $987
    b. $1,298.15
    c. $1,189.19
    d. $1,200
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