If labor costs are 60 percent of production costs, then a 15 percent increase in wage rates would increase production costs by <u>9 percent.</u>
<h3>
What are labor costs?</h3>
- The total of all employee wages, employee benefits, and payroll taxes paid by an employer constitutes the labor costs. Direct and indirect (overhead) labor costs are separated.
- While indirect costs are related to labor costs, such as personnel who maintain industrial equipment, direct costs include wages for the employees who make a product, including those on an assembly line.
- While indirect costs are related to support labor, such as personnel who maintain industrial equipment, direct costs include wages for the employees who make a product, including those on an assembly line.
- The price of goods or services may fluctuate away from their genuine cost if labor costs are poorly allocated or evaluated, which could hurt earnings.
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Answer:
Date Accounts Titles Debit Credit
Dec-31 Salaries expense $2,300
Salaries payable $2,300
Dec-31 Depreciation expense $200
(Furniture
)
Accumulated depreciation $200
(Furniture)
Dec-31 Insurance expense $450
Prepaid Insurance $450
Dec-31 Supplies expense $80
Supplies $80
Answer: a. True
Explanation: Higher interest rates tend to attract foreign investment, increasing the demand for and value of the home country's currency. Foreign investment involves capital flows from one country to another, granting extensive ownership stakes in domestic companies and assets. Foreign investment denotes that foreigners have an active role in management as a part of their investment. One major spur of this inflow and outflow is the existing interest rate a country offers. Higher interest rates increases inflow of capital. The opposite is true for countries with lower interest rates, as there is an outflow of capital to countries having higher interest rates.
