Final answer:
a. true
The statement is true; the cost per hire is calculated by totaling all recruitment-related expenses and dividing that cost by the number of hires. Understanding the difference between fixed and variable costs is integral to calculating total operational costs, as demonstrated with the example of a barber shop's costs.
Step-by-step explanation:
The statement that the cost per hire, the total amount of money spent to fill a vacancy, is computed by finding the cost of using a particular recruitment source and dividing that cost by the number of people hired to fill that type of vacancy is true. The process of calculating the cost per hire involves adding up all the expenses associated with the recruitment efforts, which may include advertising fees, agency fees, employee referrals, travel costs for interviews, signing bonuses, and the time spent by recruiters and HR staff. Once the total recruitment cost is determined, it is then divided by the number of hires to establish the average cost per hire.
In considering the total costs involved, it's helpful to understand they are the sum of fixed and variable costs. Fixed costs, such as facilities and equipment, do not change with the level of production, whereas variable costs fluctuate with the level of output, such as the costs associated with hiring additional staff. For instance, if a barber shop's fixed cost for space and equipment is $160 per day and the variable cost is $80 per barber hired, hiring additional barbers will increase the variable cost, which must be calculated alongside fixed costs to determine the total cost of operations.