Labor Productivity Can Only Increase If

question 97

Multiple Choice

Labor productivity can only increase if

• A) labor increases faster than capital.
• B) capital increases faster than labor.
• C) labor increases while capital decreases.
• D) labor and capital increase at the same rate.

---

Definitions:

Step-Down Method

An allocation method used in cost accounting to distribute overhead costs to various departments in a sequential order based on the level of service provided.

Service Department Costs

Costs incurred by departments that do not directly generate revenue, but support those that do.

Operating Departments

Units within an organization directly involved in producing goods or providing services, as opposed to administrative divisions.

Personnel Costs

Expenses related to the compensation of employees, including salaries, benefits, and taxes.