Accounting for Managers: Interpreting Accounting Information for Decision-Making, Canadian Edition

CHAPTER 10

Human Resource Decisions

LEARNING OBJECTIVES

After reading this chapter, you should be able to answer the following questions:

Which costs should be included in the cost of labour of an organization?

Why is it not necessarily correct to assume that labour costs associated with the production of a good or service are variable?

Which relevant labour costs should be included in decision making?

What are options for reducing labour costs, other than layoffs? What are the costs associated with redundancy programs?

How can an organization measure the effectiveness of human capital?

This chapter discusses the importance of human resources (HR) within an organization and explores the challenges of measuring the value of these resources. It explains the components of labour costs and how those costs are applied to the production of goods or services. The relevant cost of labour for decision-making purposes is explained. The measurement of human capital beyond cost is also discussed ...