Kelly Is an Architect,and She Is Trying to Decide Whether

question 48

Multiple Choice

Kelly is an architect,and she is trying to decide whether to hire Mike,a draftsman,to assist with her work.Kelly could hire Mike at $20 per hour,but it would take him three times as long to complete a task as it takes Kelly.Kelly is able to earn $90 per hour and has more architectural jobs than she is able to handle.Which of the following is true?

• A) Kelly should not hire Mike because it would be faster for her to do the work herself.
• B) Kelly should do the drafting work herself because she has the lower opportunity cost.
• C) Mike should be hired at the $20 per hour wage rate.
• D) Mike should be hired, but only if he is paid more than $30 per hour.
• E) Kelly should hire someone who earns minimum wage instead of Mike.

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Definitions:

Total Cost Assigned

The sum of all direct and indirect costs allocated to a specific product, project, or department.

Time-Driven Activity-Based Costing

A costing method that assigns costs based on the actual amount of time resources are used in business activities, improving cost accuracy.

Customer Support Department

A division within a company focused on assisting customers with their queries, problems, or complaints.

Number of Employees

The total count of individuals working for a company or organization, either on a full-time or part-time basis.