The introduction of production technology to replace labor in a manufacturing process would likely result in which of the following?
A) A shift in costs from variable costs to fixed costs.
B) A shift in costs from fixed costs to variable costs.
C) An increase in total manufacturing costs.
D) A decrease in total manufacturing costs.

Question

Quizplus · Accepted Answer

The introduction of production technology typically involves significant upfront investment in machinery and equipment, which are considered fixed costs. This reduces the reliance on labor, which is a variable cost that fluctuates with production volume. Thus, costs shift from variable to fixed.

The Introduction of Production Technology to Replace Labor in a Manufacturing