Chapter 22, Problem 2ADM

United States Postal Service: Mail sorting time variance

One of the operations in the United States Postal Service is a mechanical mail sorting operation. In this operation, handwritten letter mail is sorted at a rate of 1.5 letters per second. An operator sitting at a keyboard mechanically sorts the letter from a three-digit code. The manager of the mechanical sorting operation wishes to determine the number of temporary employees to hire for December. The manager estimates that there will be an additional 24,192,000 pieces of mail in December, due to the upcoming holiday season.

Assume that the sorting operators are temporary employees. The union contract requires that temporary employees be hired for one month at a time. Each temporary employee is hired to work 160 hours in the month.

• A. How many temporary employees should the manager hire for December?
• B. If each temporary employee earns a standard $17 per hour, what would be the direct labor time variance if the actual number of additional letters sorted in December was 23,895,000?