Manufacturing Direct Labor: Fixed or Variable?To retain skilled employees instead of letting them go when demand falls, Lincoln Electric trainsemployees for other tasks in the company. The Cleveland-based manufacturer of welding and cuttingparts has integrated the approach in all its operations so that it can guarantee employment for all employees who have been with the company for 3 or more years. This policy has worked for more than 60 years.Other companies such as Nestlé and Apex Precision Technology accomplish the same goal ofkeeping their employees as demand fluctuates by using part-time arrangements with the employees.Required Discuss whether manufacturing labor should be considered a fixed or a variable cost at thesecompanies.
Manufacturing Direct Labor: Fixed or Variable?
To retain skilled employees instead of letting them go when demand falls, Lincoln Electric trains
employees for other tasks in the company. The Cleveland-based manufacturer of welding and cutting
parts has integrated the approach in all its operations so that it can guarantee employment for all employees who have been with the company for 3 or more years. This policy has worked for more than 60 years.
Other companies such as Nestlé and Apex Precision Technology accomplish the same goal of
keeping their employees as demand fluctuates by using part-time arrangements with the employees.
Required Discuss whether manufacturing labor should be considered a fixed or a variable cost at these
companies.
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