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:

Financial Perspective

An viewpoint emphasizing the importance of managing a company's financial resources wisely to ensure its long-term success and stability.

Profit Margin

A financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating the efficiency of a company in managing its expenses and profits.

Required Accounting Return

The minimum return that a company needs to achieve on its investments based on accounting principles, to satisfy stakeholders or internal benchmarks.

Depreciated Straight-line

A method of calculating depreciation by equally spreading the cost of an asset over its useful life.