Cost of storing a wheel from one month

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Reference no: EM132581362

Chip Hoose is the owner of Hoose Custom Wheels. Chip has just received orders for 1,000 standard wheels and 1,250 deluxe wheels in month 1, 800 standard and 1,500 deluxe for month 2, and 800 standard and 1,200 deluxe for month 3. All orders must be filled.

The cost of making standard wheels is $10 and deluxe wheels is $16. Overtime rates are 50% higher. There are 1,000 hours of regular time and 500 hours of overtime available each month. It takes 0.5 hour to make a standard wheel and 0.6 hour to make a deluxe wheel.

The cost of storing a wheel from one month to the next is $2.

Reference no: EM132581362

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