Labor Productivity Rises

question 257

Multiple Choice

Labor productivity rises

• A) in the absence of technological progress.
• B) if firms invest in hiring more workers rather than buying more capital.
• C) if the amount of capital per worker increases.
• D) if the amount of capital per worker decreases.

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Definitions:

Required Sales

The amount of sales needed to achieve a specific financial goal, such as breaking even or reaching a profit target.

Contribution Margin Ratio

The percentage of each sales dollar remaining after variable costs are subtracted, available to cover fixed costs and provide profit.

Unit Contribution Margin

The difference between the selling price of a single unit and its variable costs, indicating the contribution towards covering fixed costs and generating profit.

Cost-Volume-Profit Analysis

Cost-Volume-Profit Analysis is a management accounting tool that helps determine how changes in cost and volume affect a company's profit.