What the cost of square capacity can be calculated as

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Reference no: EM132782342

Problem 1: A company has 5 employees who have a cost of $100 per day each but currently have no work to do; this situation is expected to last for the next two weeks. The company is considering accepting a special order that will take 5 employees one week each, commencing immediately. The work will require supervision, equivalent to 10% of the variable labour time, but all of the supervisors are very busy. Supervision costs are normally $200 per day but additional supervision will involve overtime at the rate of $300 per day. The relevant cost for the order is:

Select one:

a. $750

b. $1,250

c. $3,000

d. $3,250

Problem 2: A call centre department incurs wage costs of $100,000 per year for staff to make 25,000 sales calls each year. At the end of the year, management reports disclose that the actual number of calls made is 23,000. The cost of square capacity can be calculated as

Select one:

a. $8,000

b. $8,050

c. $8,750

d. $2,000

Reference no: EM132782342

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