When Computers Are Used to Replace Workers on a Factory

question 4

Multiple Choice

When computers are used to replace workers on a factory production line, the wage gap:

• A)between skilled and unskilled workers is likely to fall
• B)will rise only if the company can increase the price of its product
• C)between skilled workers and unskilled workers is likely to increase
• D)between skilled workers and unskilled workers will not change

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Definitions:

Direct Labour

Direct labour refers to the work of employees who are directly involved in the production of goods or the delivery of services, opposite to indirect labor.

Overhead

The general operating costs not directly tied to production, including administrative and facility expenses.

Direct Materials

Raw materials that are directly incorporated into a finished product and can be directly attributed to the product.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual products or job orders, calculated before the production period begins based on estimated costs.