Answer the Following

question 31

Essay

Answer the following:
a)A backhoe,a piece of excavating equipment which is mounted on a tractor,acts as both a complement and as a substitute to labor.Explain how it could be used as a complement or a substitute to labor.
b)Explain why the standard of living increases in general,even for labor,when capital substitutes for labor.

---

Definitions:

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.

Actual Quantity Purchased

The true amount of materials or goods that a company buys within a specific time frame, which can be compared to budgeted or planned quantities.

Fixed Manufacturing Overhead Volume Variance

The difference between budgeted fixed manufacturing overhead and the amount applied to production, based on standard hours.