Your VP of HR has requested that you consider increasing the number of contingent employees from 20% currently to 40%. This will considerably lower your labor costs. However, you also know that the total of 500 production employees you have at your plant, you never drop the headcount below 350, even in the slow season. If you reduce the fixed workforce to 60%, you are concerned that you will lose critical skillsets and this could result in productivity losses, accidents, quality problems, etc. Instead you propose that you only increase the contingent labor by: (a) 200 workers (b) 50 workers (c) 150 workers (d) 100 workers

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter10: Short-term Decision Making
Section: Chapter Questions
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Your VP of HR has requested that you consider increasing the
number of contingent employees from 20% currently to 40%. This
will considerably lower your labor costs. However, you also know that
the total of 500 production employees you have at your plant, you
never drop the headcount below 350, even in the slow season. If you
reduce the fixed workforce to 60%, you are concerned that you will
lose critical skillsets and this could result in productivity losses,
accidents, quality problems, etc. Instead you propose that you only
increase the contingent labor by:
(a) 200 workers
(b) 50 workers
(c) 150 workers
(d) 100 workers
Transcribed Image Text:Your VP of HR has requested that you consider increasing the number of contingent employees from 20% currently to 40%. This will considerably lower your labor costs. However, you also know that the total of 500 production employees you have at your plant, you never drop the headcount below 350, even in the slow season. If you reduce the fixed workforce to 60%, you are concerned that you will lose critical skillsets and this could result in productivity losses, accidents, quality problems, etc. Instead you propose that you only increase the contingent labor by: (a) 200 workers (b) 50 workers (c) 150 workers (d) 100 workers
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