The following information relates to a company's aggregate production planning activities: Beginning Workforce = 35 workers
Production per Employee = 1,250 units per quarter
Hiring Cost = $500 per worker
Firing Cost = $1,000 per worker
Inventory Carrying Cost = $20 per unit per quarter
If a level production strategy is used then the cost of the level production plan (inventory costs plus hiring and firing costs) is
A) $20,000.
B) $645,000.
C) $1,250,000.
D) $1,270,000.

Question

The following information relates to a company's aggregate production planning activities:  Beginning Workforce = 35 workers
Production per Employee = 1,250 units per quarter
Hiring Cost = $500 per worker
Firing Cost = $1,000 per worker
Inventory Carrying Cost = $20 per unit per quarter
If a level production strategy is used then the cost of the level production plan (inventory costs plus hiring and firing costs) is
A) $20,000. 
B) $645,000. 
C) $1,250,000. 
D) $1,270,000.

Quizplus · Accepted Answer

The Answer of The following information relates to a company's aggregate production planning activities:  Beginning Workforce = 35 workers
Production per Employee = 1,250 units per quarter
Hiring Cost = $500 per worker
Firing Cost = $1,000 per worker
Inventory Carrying Cost = $20 per unit per quarter
If a level production strategy is used then the cost of the level production plan (inventory costs plus hiring and firing costs) is
A) $20,000. 
B) $645,000. 
C) $1,250,000. 
D) $1,270,000.

The Following Information Relates to a Company's Aggregate Production Planning