COST ACCOUNTING
VARIABLE COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Output falls at a slower rate than the fall in the number of workers employed
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Output falls at a faster rate than the fall in the number of workers employed
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Output rises at a slower rate than the rise in the number of workers employed
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Output always rises as the number of workers employed increases
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Detailed explanation-1: -A. Output falls at a slower rate than the fall in the number of workers employed. A rise in labor productivity means that a company can use fewer labor resources and produce more output. Thus, the output decreases at a slower rate than how the number of workers decreases since fewer workers can produce more output.
Detailed explanation-2: -Growth in labor productivity depends on three main factors: saving and investment in physical capital, new technology, and human capital.
Detailed explanation-3: -In economics, productivity refers to how much output can be produced with a given set of inputs. Productivity increases when more output is produced with the same amount of inputs or when the same amount of output is produced with less inputs.
Detailed explanation-4: -An increased number of workers can be due to several factors, such as immigration, increasing population, an aging population, and changing demographics. Policies that encourage immigration will increase the supply of labor, and vice versa.
Detailed explanation-5: -Productivity decreases when: less output is produced without decreasing the input. the same output is produced with more input.