We Typically Think of Labor as a Variable Cost, Even

question 72

Multiple Choice

We typically think of labor as a variable cost, even in the very short run. However, some labor costs may be fixed. Which of the following items represents an example of a fixed labor cost?

• A) An hourly employee
• B) A temporary worker who is paid by the hour
• C) A salaried manager who has a three-year employment contract
• D) none of the above

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Definitions:

Full Coverage

Refers to insurance policies or warranties that offer comprehensive protection against a wide range of potential damages or losses.

Expected Wealth

The anticipated amount of money or assets that an individual or entity forecasts to accumulate over a period.

Insurance Policy

A contract between an insurer and a policyholder wherein the insurer promises to pay for specific potential future losses in exchange for a periodic payment.

Expected Loss

The anticipated amount of loss a business may suffer due to risks or future uncertainties.