Direct Factory Labor Is Usually Considered to Be

question 7

Multiple Choice

Direct factory labor is usually considered to be

• A) a variable cost.
• B) a fixed cost.
• C) a semi-variable cost.
• D) a mixed cost.

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Definitions:

Break-even Analysis

A calculation to determine the sales volume at which total revenues equal total costs, indicating no profit or loss.

Contribution Margin Ratios

The ratio of contribution margin (sales minus variable costs) to sales revenue, indicating the percentage of sales revenue that exceeds variable costs.

Break-even Point

The production level at which total revenues equal total expenses, resulting in no profit or loss.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, reflecting a company’s fixed versus variable costs structure.