Use the Following Information to Answer Questions 7, 8 and 9

question 1

Multiple Choice

Use the following information to answer Questions 7, 8 and 9
A company that produces diet supplements that uses a highly automated packaging process has the following production and revenue alternatives for three products A, B, and C) that are feasible to produce with existing plant and equipment. Total revenue is in thousands of dollars per month. Total cost for the first shift is $200,000 per month - of which $120,000 is labor, $60,000 is other variable costs, and $20,000 is fixed cost. As the number of shifts is increased, fixed cost remains at $20,000 per month while variable costs other than labor remain the same per shift. For the second shift, labor must be paid 1.2 times the amount paid on the first shift. For the third shift, labor must be paid 1.4 times what it receives in the first shift.
-What is the total monthly cost if the firm uses two shifts?

• A) $144,000
• B) $200,000
• C) $240,000
• D) $344,000
• E) $404,000

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Definitions:

Codetermination

A practice in corporate governance that allows workers to participate in management decisions and company board representation.

Enterprise Unionism

A labor union organization model where each union represents workers of a single enterprise rather than workers across multiple enterprises in the same industry.

Seniority

A system in which priority or status is given to individuals within a group based on the length of service or tenure in the organization.

Worker Solidarity

The unity and support exchanged among workers from different sectors and backgrounds, often in the pursuit of common goals or in response to mutual challenges.