Santa Lucia Industries employs 500 workers in the factory. These workers produced 85,000 units in 2014. Due to a special order, the units produced in 2015 increased to 95,000 units. However, Santa Lucia produced these units without adding workers. How is that possible?
A) The labor cost associated with the additional units sold will be a relevant cost.
B) The employees were a flexible resource in this situation.
C) The plant had some unused activity capacity.
D) none of the above

Question

Quizplus · Accepted Answer

The plant had some unused activity capacity, meaning that they were able to increase production without adding more workers because they had some unused resources or capacity.

Santa Lucia Industries Employs 500 Workers in the Factory