Question

Digby's turnover rate for this year is 6.29%. This rate is projected to remain the same next year and no further downsizing will occur from automating. Digby plans to spend an additional $500 beyond the extra amount above the $1000 recruiting base it spent this year. The goal of this additional investment is to improve the quality of applicants. What would the total recruiting cost be for Digby next year?

Answer 1

Answer:

$208,443

Explanation:

The computation of total recruiting cost be for Digby next year is shown below:-

$R_1 = (B + R_o + A)\times N$

as

B indicates baseline spend = $1,000

$R_o$ indicates current year recruits spend = $5,000

A indicates additional next year spend = $500

N indicates the number of new employees for next year = Total employees × turnover rate

N = 510 × 0.0628787

= 32.0681538

now we will put the values into the above formula.

R1 = ($1,000 + 5000 + $500) × 32.0681538

= $208,443