If Direct Materials Cost Per Unit Decreases, the Amount of Sales

question 121

True/False

If direct materials cost per unit decreases, the amount of sales necessary to earn a desired amount of profit will decrease.

---

Definitions:

Surplus

An excess quantity, especially referring to the situation where supply exceeds demand in a market, often leading to a decrease in prices.

Binding Minimum Wage

A minimum wage rate that is set above the equilibrium wage in the labor market, causing potential unemployment by forcing employers to pay more than the market rate for labor.

Incomes

Earnings received by individuals or entities for their labor, investments, or participation in business activities, often measured on a regular basis like monthly or yearly.

Minimum-Wage Laws

Legislation that sets the lowest hourly wage rate that an employer can legally pay to workers, aiming to ensure a minimum standard of living for employees.