Answered: Manufacturing Direct Labor: Fixed or…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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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 3 or more years. This policy has worked for more than 60 years.
Other companies such as Nestlé 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.

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