Variables Cost

Inventory carrying cost $$7$ per unit per month

Subcontracting cost $$25$ per unit

Average pay rate $$12$ per hour $(8$ hours per day$)$

Overtime pay rate $$18$ per hour $($above $8$ hours per day$)$

Labor$-$hours needed to produce one unit $1\mathrm{.}5$ hours per unit

Units per day produced $50$

Beginning inventory $0$

Planned ending inventory $0$

Lost sales per unit $$30$

This chart provides the demand for the product and the number of production days per month.

Months Demand Production Days

January $120022$

February $80018$

March $60021$

April $150021$

May $130022$

June $120020$