43. (Variance analysis) Cost control in the Personnel Office of Minnesota Wholesale is evaluated based on engineered cost concepts. The office incurs both variable and fixed costs. The variable costs are largely driven by the amount of employee turnover. For 2000, budgeted costs in the Personnel Office were:

Fixed $200,000 Variable 400,000 (based on projected turnover of 1,000 employees)

For 2000, actual costs in the Personnel Office were:
Fixed $210,000 Variable 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 Minnesota Wholesale. Does this method of evaluation encourage the Personnel Office managers to hire low-quality workers? Explain.