Briefly discuss the advantages and disadvantages of each of these planning strategies: a. Maintain a level rate of output and let inventories absorb fluctuations in demand. b. Vary the size of the workforce to correspond to predicted changes in demand requirements. c. Maintain a constant workforce size, but vary hours worked to correspond to predicted demand requirements.
Diego Company has three employees-a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee:
Consultant Computer Programmer Administrator Regular earnings rate $3,800 per week $38 per hour $42 per hour Overtime earnings rate* Not applicable 2 times hourly rate 1.5 times hourly rate Number of withholding allowances 122 *For hourly employees, overtime is paid for hours worked in excess of 40 hours per week. \begin{aligned} &\begin{array}{lccc} & \textbf { Consultant } & \textbf { Computer Programmer } & \textbf { Administrator } \\ \hline \text { Regular earnings rate } & \$ 3,800 \text { per week } & \$ 38 \text { per hour } & \$ 42 \text { per hour } \\ \text { Overtime earnings rate* } & \text { Not applicable } & 2 \text { times hourly rate } & 1.5 \text { times hourly rate } \\ \text { Number of withholding allowances } & 1 & 2 & 2 \end{array}\\ &\text { *For hourly employees, overtime is paid for hours worked in excess of } 40 \text { hours per week. } \end{aligned} Regular earnings rate Overtime earnings rate* Number of withholding allowances Consultant $3,800 per week Not applicable 1 Computer Programmer $38 per hour 2 times hourly rate 2 Administrator $42 per hour 1.5 times hourly rate 2 *For hourly employees, overtime is paid for hours worked in excess of 40 hours per week.
For the current pay period, the computer programmer worked 55 hours and the administrator worked 52 hours. The federal income tax withheld for all three employees, who are single, can be determined from the wage bracket withholding table in Exhibit 3 in the chapter. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and one withholding allowance is $75. Determine the gross pay and the net pay for each of the three employees for the current pay period.
Chemy Corporation produces three products in a monthly joint production process. During the first stage of the process liquids and chemicals costing $60,000\$ 60,000$60,000 are heated and three different compounds emerge: 3,000 gallons of Molecue worth $22\$ 22$22 per gallon are created from the steam; 10,000 gallons of Borphue worth $15\$ 15$15 are drained from the tank; and 1,000 gallons of the tank residue, labeled as Polygard, are sold as fertilizer for $5.50\$ 5.50$5.50 per gallon. Before Molecue is sold, it must be purified in another process that costs $10,000\$ 10,000$10,000, and before the Polygard fertilizer is sold, it must be bottled at a price of $1.50\$ 1.50$1.50 per gallon.
c. BioMorphs has an offer to buy Polygard bulk at the split-off point without bottling for $3,500\$ 3,500$3,500 per month. What is the incremental profit (loss) to BioMorphs if it accepts the offer?
Both state and local governments get a large portion of their revenues from intergovernmental revenues. Is this an effective means for getting revenue for essential government programs, or is there a better way? Explain your answer.
