The Division of Labour

question 79

Multiple Choice

The division of labour:

• A)reduces the level of transaction costs significantly by simplifying production.
• B)is efficient because it leads to technical progress.
• C)increases productivity by reducing work to ordinary, dull activities.
• D)increases efficiency by requiring people to use long periods of time to work on one task.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including material and labor costs.

Cost of Goods Manufactured

The total cost of materials, labor, and overhead incurred for products completed during a specific time period.

Factory Overhead

The total of all indirect costs associated with manufacturing, such as indirect labor, maintenance, and utilities that cannot be directly traced to a specific product.

Indirect Labor

Labor costs for employees who assist in the production process but are not directly involved in the creation of the final product, such as supervisors and maintenance workers.