Tine Company makes carpets. A customer wants to place a special order for 1,000 carpets in navy blue with the company logo woven in the middle, to be priced at $30 each. Normally, Tine would charge $60 per carpet for this type of order. Tine figures that yarn and backing will cost $12 per carpet, variable overhead (machining, electricity) is $5 per carpet, direct labour is $10 per carpet, and one setup will be required at $800 per setup. The setup charge costs are 100% labour. Currently, the workers needed to set up and make the carpets are working at Tine. Their wages will be paid whether or not the special order is accepted. Tine's policy is to avoid layoffs to the extent possible.
-Refer to the Figure.Which of the following is a qualitative factor that Tine would consider when making the decision to accept or reject the special order?
A)the cost of yarn and backing
B)the cost of setup labour
C)the no-layoff policy
D)the use of machinery

Question

Quizplus · Accepted Answer

Tine's no-layoff policy is a qualitative factor that would be considered when making the decision to accept or reject the special order. This means that Tine would need to consider the impact on their employees and weigh the benefits of the special order against the potential negative effects on their workforce. The other options (A, B, and D) are all quantitative factors that would be considered in the decision-making process based on their financial impact.

Tine Company Makes Carpets