Given the Following Information

question 137

Essay

Given the following information:
Required:
a. Calculate an estimate of HR department costs using the hi-low method using # of new hires as the variable parameter
b. Calculate an estimate of HR department costs using the hi-low method using # termination as the variable parameter
c. Which parameter do you feel is a better driver of HR cost?

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Definitions:

Direct Labour

The wages paid to workers directly involved in the production of goods or services, considered a variable cost.

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services.

Net Operating Income

The total profit of a business after operating expenses are subtracted from gross profit but before deducting interest and taxes.

Contribution Margin

The amount of revenue remaining after deducting variable costs, which can be used to cover fixed costs and contribute to profit.