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Why do US companies outsource jobs?
To reduce labor costs
What does the term material broke out mean?
Material break out means to itemize the costs of materials for a specific project or to separate them from the labor, management, etc. costs.
Costs can either be prime costs or conversion costs but not both?
direct labor
Is Direct Labor included in Overhead costs?
Direct labor are not part of overhead costs and shown separately while indirect labor are part of overhead costs and included in overhead cost because those labor cannot be allocated separately or identifiable separately.
What costs are direct labor costs?
Salaries and wages of workers directly involve in goods manufacturing is direct labor cost.
What is the impact of changes in the marginal cost of labor on a company's overall production costs?
Changes in the marginal cost of labor can significantly impact a company's overall production costs. When the marginal cost of labor increases, it can lead to higher production costs for the company as they have to spend more on labor. Conversely, if the marginal cost of labor decreases, the company's production costs may decrease as well. This relationship between labor costs and production costs is crucial for companies to consider when making decisions about their workforce and production processes.
Why might a company move its production factory from Texas to Mexico?
To take advantage of lower labor costs
What is the number-one driver of labor costs?
Without any government influences, the main driver of labor costs is supply/demand. Generally however, a system of minimum wages exists which raise labor costs to a particular level.
What does BoQ mean?
In the business world, BoQ means "bill of quantities." A bill of quantities is a document used in tendering in the construction industry in which materials, parts, labor, and labor costs are itemized.
What is the formula to calculate conversion costs?
it is direct labor plus overhead costs
In order to reduce labor costs what might a company do?
some companies have outsourced jobs to Another Country as they can reduce labor costs that way.
What are the advantages of outsourcing?
Reduced labor costs.
