A Standard Work Year Is 2,000 Hours at the Luther

question 52

Multiple Choice

A standard work year is 2,000 hours at the Luther Mill and it takes about an hour and a half to fill a customer order. The manager at the mill is always concerned about employee idle time, so he aims for a capacity cushion of two percent. Last year saw 15,000 customer orders at the mill and the manager has a new John Deere in mind as a company car, so he hopes that there is an increase of 15% in customer orders for next year. How many workers will the manager need to have at the mill next year?

• A) 10
• B) 13
• C) 16
• D) 19

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Definitions:

Excess Cash

Additional cash held by a business that exceeds its operational and investment needs.

Earnings Per Share

A financial metric that measures the total earnings available to shareholders divided by the number of shares outstanding.

Debt/Equity Ratio

A ratio demonstrating the comparative levels of shareholders' equity and borrowed funds deployed to finance company assets.

Residual Dividend Policy

A strategy where dividends paid to shareholders are based on earnings left over after all operational and project expenses are covered.