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

question 41

Multiple Choice

The following information relates to a company's aggregate production planning activities: Beginning Workforce = 35 workers
Production per Employee = 1,250 units per quarter
Hiring Cost = $500 per worker
Firing Cost = $1,000 per worker
Inventory Carrying Cost = $20 per unit per quarter
If a level production strategy is used then the cost of the level production plan (inventory costs plus hiring and firing costs) is

• A) $20,000
• B) $645,000
• C) $1,250,000
• D) $1,270,000

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Definitions:

Payee

The party to whom payment of a promissory note is to be made.

Drawee

The party in a transaction who is directed to pay a certain amount of money, often seen in the context of a check or draft.

Internal Control

Processes and procedures implemented by an organization to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Limitations

Restrictions or constraints that limit the scope, effectiveness, or action of something.