Question

Fuller Company makes frames. A customer wants to place a special order for 600 frames in green with the company logo painted on the frame, to be priced at $40 each. Normally, Fuller would charge $90 per frame for this type of order. Fuller figures that wood and glass will cost $16 per frame, variable overhead (machining, electricity) is $4 per frame, direct labor is $12 per frame, and one setup will be required at $1,000 per setup. The set-up charge costs are 100% labor. Currently, the workers needed to set up for and make the frames are working at Fuller. Their wages will be paid whether or not the special order is accepted. Fuller's policy is to avoid layoffs to the extent possible.
Which of the following is a qualitative factor that Fuller would consider in making the decision to accept or reject the special order?

a. the no-layoff policy
b. cost of setup labor
c. cost of yarn and backing
d. the machining and electricity
e. the use of machinery

Answer 1

Answer:

The qualitative factor which Fuller will consider for this order is:

b. Cost of setup labor.

Explanation:

Answer:

The qualitative factor which Fuller will consider for this order is:

b. Cost of setup labor.  

B. Cost of setup Labor: It includes salaries that are been paid to all workers working as full time and part time  

While the number of wages and the number of employees wage requirements vary by cost controls, their industries and the center on achievment of their best results with possible lower labour costs.

As any  leader of the company knows the things related to it that, the most important and biggest cost of doing any sort of  business is often labor. Cost of labor setup, which may account for as 70% of almost total business costs which include wages of the employees,their benefits, payroll and all other taxes related to them.  

Any HR professionals spend only  their 15% of time managing the labor costs. Engaging new employees, hiring new and efficient workers and developing them over their course of their career are always top of mind for HR professionals.

So, the most important point here is the cost labors setup.