A Firm Practices a Pure Chase Strategy

question 27

Multiple Choice

A firm practices a pure chase strategy.Production last quarter was 1000.Demand over the next four quarters is estimated to be 900,700,1000,and 1000.Hiring cost is $20 per unit,and layoff cost is $5 per unit.Over the next year,what will be the sum of hiring and layoff costs?

• A)$500
• B)$2,500
• C)$7,500
• D)$7,000
• E)$12,500

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Definitions:

RRSP

Registered Retirement Savings Plan, a Canadian investment account for holding savings and investment assets, with tax advantages.

Compounded

The process of accumulating interest on an investment or loan where the earned interest is added to the principal, leading to interest being earned on interest.

Annually

Occurring once every year, often used in the context of events, payments, or calculations that repeat on a yearly basis.

RRSP

Registered Retirement Savings Plan, a retirement savings and investment vehicle for employees and the self-employed in Canada, offering tax benefits.