A Manufacturing Company,hit by a Slump in Demand,is Experiencing a Labor

question 29

Multiple Choice

A manufacturing company,hit by a slump in demand,is experiencing a labor surplus.The company expects the market to improve in six months,and it does not want to lay off any of its employees.Which of the following strategies is an equitable way to handle this issue and spread the burden more fairly?

• A) demotions
• B) outsourcing
• C) reduced work hours
• D) overtime
• E) employing temporary workers

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Definitions:

Direct Labor Costs

Expenses directly associated with the labor used in the production of goods or services.

Manufacturing Overhead

Costs incidental to the manufacturing process that do not include the costs of direct materials and direct labor.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of materials and labor.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods within a specified period, including costs related to materials, labor, and manufacturing overhead.