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When the firm attains minimum average variable cost how many units of labor is it using?
Wiki User
∙ 10y ago
When a firm attains minimum average variable cost, the number of units of labor it is using depends on the average product.
Wiki User
∙ 10y ago
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Why does the marginal cost curve cut through the average variable cost curve exactly at the minimum of the average variable cost curve?
Marginal cost curve cuts average cost (variable or total cost) at its minimum simply to portray the law of variable proportions. The idea is as labor is increased with capital being fixed, productivity increases upto a point and then decreases and later becomes negative. To relate the same productivity with average cost function, the average cost first decreases , reaches a minimum and then increases. Now marginal cost is just a change in the total cost. Logic says that when MC is less than AC productivity is favourable, thus cost is falling. When MC is more than AC productivity is not favourable and thus the rising portion of the cost curve. When MC = AC , the productivity that was reducing the average cost per unit has maximized and from then on starts rising cost(or decreasing productivity). That is the only point where they can intersect.
Assuming that direct labor is a variable cost product costs under variable costing include only?
B. Direct materials, direct labor, and variable manufacturing overhead.
Is labor cost fixed or vriable cost?
Labor costs can be considered fixed, variable or both depending on the business. If workers are hourly (e.g., factory workers, delivery drivers, etc.), labor is generally considered variable. If workers are on an annual salary, but are hired and fired based on production needs (e.g., floor managers, plant managers, etc.), labor can be considered variable. If workers are on an annual salary, but are not hired and fired based on production needs (e.g., Chief Financial Officer, Director of Operations, etc.), labor can be considered fixed.
Resource cost can be associated with labor cost or material consumable resources?
Variable costs not Resource
Is labor a fixed cost?
Labor costs are fixed with respect to the price of each unit. This is because it takes the same amount of time to produce each identical unit. However, in the bigger picture labor is a variable cost. You cannot be certain how many hours people are going to work until after they do.
Why does the marginal cost curve cut through the average variable cost curve exactly at the minimum of the average variable cost curve?
Marginal cost curve cuts average cost (variable or total cost) at its minimum simply to portray the law of variable proportions. The idea is as labor is increased with capital being fixed, productivity increases upto a point and then decreases and later becomes negative. To relate the same productivity with average cost function, the average cost first decreases , reaches a minimum and then increases. Now marginal cost is just a change in the total cost. Logic says that when MC is less than AC productivity is favourable, thus cost is falling. When MC is more than AC productivity is not favourable and thus the rising portion of the cost curve. When MC = AC , the productivity that was reducing the average cost per unit has maximized and from then on starts rising cost(or decreasing productivity). That is the only point where they can intersect.
Direct labor a variable cost or semi-variable cost?
Direct labor is variable cost as it varies with the change in level of production of units.
What is the differences between Fixed Direct labor with variable direct labor?
Direct labor which do not vary with level of production is fixed direct labor while labor vary with change in production is variable direct labor.
Is indirect labor a variable or mixed cost?
It is a variable cost!!
Please can you tell me whether labor costs may be both fixed and variable costs?
Labor cost can be fixed as well as variable. That labor which varies with changes in level of production then it is variable cost but if labor remain fixed then it is fixed cost.
Is labor a fixed or variable cost?
Variable. Jessica Nichole Sims
Variable manufacturing overhead cost per direct labor hour?
Variable manufacturing overhead cost per direct labor hour means the variable overhead cost spent for one single labor hour and formula is as follows:Variable overhead cost per labor hour = total variable overhead cost / Total direct labor hours
Assuming that direct labor is a variable cost product costs under variable costing include only?
B. Direct materials, direct labor, and variable manufacturing overhead.
Is indirect labor a variable cost?
If indirect labor change with the change of units of product then indirect labor is a variable cost. If change in the quantity of units has no impact on indirect labor cost then it is a fixed cost.
Why is labor a variable cost?
Labor cost is variable cost because labor is paid for every single unit of product is made. For example if labor cost for making 1 unit is 10 then making 10 units will be 100 so as much as production level changing labor cost changing that;s why it is variable cost.
Is direct labor a variable cost or product cost?
Direct labor is variable cost as well as product cost but for variable cost it must vary with the change in production level otherwise it will be fixed cost.
Is labor always a variable cost?
It depends on the nature of payment and work, if labor is fixed and don't have any relation with the volume of production then it is fixed otherwise it will be variable.
