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After the change,direct labor costs as a percentage of sales are projected to decrease because:
Escalator Clauses
Provisions in a contract that allow for automatic adjustments in certain conditions, such as price or wage increases, based on predefined criteria like inflation rates.
Compensation Rates
The amount of pay or benefits that an employee receives from their employer for their work.
Internal Equity
The practice of ensuring that employees are compensated fairly in relation to one another within the same organization.
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