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Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins
Edition 6ISBN: 978-0078025532Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins
Edition 6ISBN: 978-0078025532 Exercise 36
Manufacturing Direct Labor: Fixed or Variable
To retain skilled employees instead of letting them go when demand falls, Lincoln Electric trains employees for other tasks in the company. The Cleveland-based manufacturer of welding and cutting parts has integrated the approach in all its operations, so that it can guarantee employment for all employees who have been with the company for three or more years. This policy has worked for 60 years.
Other companies such as Nestle and Apex Precision Technology accomplish the same goal of keeping their employees as demand fluctuates by using part-time arrangements with the employees.
Required Discuss whether manufacturing labor should be considered a fixed or a variable cost at these companies.
To retain skilled employees instead of letting them go when demand falls, Lincoln Electric trains employees for other tasks in the company. The Cleveland-based manufacturer of welding and cutting parts has integrated the approach in all its operations, so that it can guarantee employment for all employees who have been with the company for three or more years. This policy has worked for 60 years.
Other companies such as Nestle and Apex Precision Technology accomplish the same goal of keeping their employees as demand fluctuates by using part-time arrangements with the employees.
Required Discuss whether manufacturing labor should be considered a fixed or a variable cost at these companies.
Explanation
Verified
Verified
Fixed Cost: Fixed costs are those cost w...
Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins
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