Question

When using a pure chase strategy with hires and fires, calculate the number of employees needed to satisfy each period’s demand. Once you have established the number of employees needed, either hire or fire as required. Use the following data and the pure chase strategy to calculate the cost of satisfying demand in Periods 1 through 8: A B 4 Cost Data $12.505 Regular-time labor cost per hour $18.75 6 Overtime labor cost per hour $125.00 7 Subcontracting cost per unit (labor only) $25.00 8 Back-order cost per unit per period $10.00 9 Inventory holding cost per unit per period $800.00 10 Hiring cost per employee $500.00 11 Firing cost per employee1213 Capacity Data 14 Beginning workforce (employees) 15 Beginning inventory (units) 16 Production standard per unit (hours) 17 Regular-time available per period (hours) 18 Overtime available per period (hours) 19 20 Demand Data (units) 21 Period 1 192022 Period 2 2160 23 Period 3 144024 Period 4 1200 25 Period 5 204026 Period 6 240027 Period 7 174028 Period 8 150029 30 Total Number of Periods 8After evaluating the chase strategy, select all statements below which is are true. A. The total firing cost is larger than the total firing cost. B. The total hiring cost is $62,400.C. The total production cost is $1,548,900.D. The total hiring cost is larger than the total firing cost. E. Overtime labor cost is $200,000.F. The total regular-time labor cost is $1,440,000.

Answer 1

B. The total hiring cost is $62,400

D. The total hiring cost is larger than the total firing cost.

E. Overtime labor cost is $200,000.

Step-by-step explanation:

The hiring cost of the labor is greater than the firing cost because the company needs more workforce to meet the finished goods demand in the certain period. The hiring cost of the employees is $800 per labor and company needs 78 more labor to meet the demand. The total hiring cost will be $800 * 78 labors = $62,400.