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Absenteeism at ONO Inc. ONO Inc. is an auto-supply company with 11 employees. In addition, there are two supervi- sors and Fred Donofrio, the owner and general manager. Last year, ONO did $7 million in busi- ness and earned $355,000 in profits ($525,000 before taxes). The auto-supply business is Part 1 Environment extremely competitive, and owners must constantly be on the lookout for ways to reduce costs to remain profitable. Employee salaries at ONO average S26.50 an hour, and benefits add another 33 percent to these labor costs. The two supervisors earn an average of 35.50 an hour, with a similar level (percentage) of benefits. Employees receive 2 weeks of vacation each year and 12 days of paid sick leave. Over the last 2 years, Fred Donofrio has noted an increasing rate of absenteeism among his 11 employees. (There seems to be no similar problem with the two supervisors.) Last week, he asked Cal Jenson, his most senior supervisor, to go through the records from last year and determine how much absenteeism had cost ONO. Further, he asked Cal to make any recommendations to him that seemed appropriate depending on the magnitude of the problem. Cal determined that ONO had lost a total of 539 employee labor-hours (67.375 days) to absenteeism last year. (This figure did not, of course, include vacation time. Further, he esti- mated that he and the other supervisor together had averaged 1.5 hours in lost time whenever an employee was absent for a day. This time had been spent dealing with the extra problems (rescheduling work, filling in for missing workers, etc.) that an absence created. On several oc- casions last year, ONO had been so short of help that temporary workers had to be hired or present employees had to work overtime. Cal determined that the additional costs of overtime and outside help last year totaled $14,500. Cal is now in the process of preparing his report to Fred Donofrio. Questions 1. What figure will Cal Jenson report to Fred Donofrio for the amount that absenteeism cost ONO last year? 2. Is absenteeism a serious problem at ONO? Why or why not? 3. What recommendations for action could Cal Jenson make to Fred Donofrio