(Variance analysis) Cost control in the Personnel Office of Johnson Robotics is evaluated based on engineered cost concepts. The office incurs both vari¬ able and fixed costs. The variable costs are largely driven by the amount of employee turnover. For 2006, budgeted costs in the Personnel Office were: LO.1

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Fixed Variable $200,000 400,000 (based on projected turnover of 1,000 employees) For 2006, actual costs in the Personnel Office were: Fixed Variable $220,000 450,000 (actual turnover of 1,050 employees) Using traditional variance analysis, evaluate the control of fixed and variable costs in the Personnel Office of Johnson Robotics. Does this method of eval- uation encourage the Personnel Office managers to hire low-quality workers? Explain.