The Following Information Relates to a Company's Aggregate Production Planning

question 1

Multiple Choice

The following information relates to a company's aggregate production planning activities: Beginning Workforce = 50 workers
Production per Employee = 250 units per quarter
Hiring Cost = $1000 per worker
Firing Cost = $1,500 per worker
Inventory Carrying Cost = $15 per unit per quarter
If a chase demand strategy is used then the number of workers hired at the start of quarter 2 is

• A)0.
• B)50.
• C)100.
• D)200.

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Definitions:

Direct Materials Price Variance

The difference between the actual cost of direct materials and the expected standard cost, indicating how well a company controls its material costs.

Controllable Variance

Controllable Variance is the difference between actual spending and budgeted amounts that management could control or influence directly.

Variable Overhead

Costs that vary with production output, such as utilities or raw materials, but are not directly tied to a specific unit of production.

Operating Results

The financial outcomes achieved from a company's core business operations.