(Last Word) If the Minimum Wage in the Restaurant Industry

question 7

Multiple Choice

(Last Word) If the minimum wage in the restaurant industry increases over time, eventually we would expect

• A) the restaurant industry to expand as higher wages drive up demand.
• B) there to be fewer of all types of restaurants, but no change in the proportion of mom and pop restaurants relative to chain restaurants.
• C) the ratio of mom and pop restaurants to highly capitalized chain restaurants to increase.
• D) the ratio of highly capitalized chain restaurants to mom and pop restaurants to increase.

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Definitions:

Labour Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain number of units, valued at the standard labor rate.

Direct Labour Cost

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

Direct Material Costs

The costs of raw materials that can be directly traced to the production of a specific product.

Direct Material Quantity Variance

The difference between the actual amount of direct materials used and the standard amount expected to be used, multiplied by the standard cost per unit of material.