El Eram Inc

question 106

Multiple Choice

El Eram Inc.is automating processes so the company can meet its demand with a smaller workforce.The CEO asks Monica,the vice president of human resources,for advice on how to address the resulting labor surplus.Monica studies the workforce and observes that many employees are in their 50s and 60s.Furthermore,these employees are the highest-paid workers in every job category.Based on this information,what should Monica suggest as the most effective way of addressing El Eram's labor surplus?

• A) The workforce should be downsized,with layoffs focusing on the older employees.
• B) Retrain the older employees in order to make them to work more productively.
• C) Provide performance-based pay to increase production output by the employees.
• D) Replace the employees with contract workers.
• E) Offer early-retirement incentives to the employees in their 50s and 60s.

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life evenly.

Depreciation Expense

Assigning the cost of a solid asset across its useful lifespan.

Journal Entry

A record of financial transactions in the accounting books, showing accounts affected, amounts, and date.

Depreciable Cost

The total cost of a fixed asset that is allocated to depreciation expense over the asset's useful life, calculated as the asset's cost minus its salvage value.