If 20,000 Hours of Labor Were Used in the Expenditure

question 7

Multiple Choice

If 20,000 hours of labor were used in the expenditure base, $1,000,000 was paid in salary to produce 5,000 outputs, and wages are expected to increase by 5%, the cost standard would be:

• A) 4.0 hours per output.
• B) $200 per output.
• C) 4.2 hours per output.
• D) $210 per output.

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Definitions:

Salary

Regular payment from an employer to an employee, often expressed on an annual basis.

Capital Balances

Represent the amount of funds contributed by owners plus retained earnings in a company's equity.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.