The Use of Large Amounts of Labor Relative to Capital

question 16

Multiple Choice

The use of large amounts of labor relative to capital in an economy indicates:

• A)​labor-intensive production.
• B)​capital-intensive production.
• C)​that wage rates will be relatively high.
• D)​that hand-made goods are of better quality than machine-made goods.

---

Definitions:

Units of Product

The quantity of product items or goods produced.

Actual Hours Worked

This refers to the total hours an employee has been physically present and working at their job within a specific period.

Direct Labor Costs

The wages and benefits paid to employees who are directly involved in the production of goods or services.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead and the standard cost of variable overhead allocated for the actual production.