At a plant where a union agreement sets annual salaries and conditions,annual labour costs usually:
A)depend on the scheduling of floor workers.
B)are considered a variable cost.
C)are considered a fixed cost.
D)depend on the scheduling of production runs.

Question

Quizplus · Accepted Answer

Since the annual salaries and conditions are set by a union agreement, the labour costs are considered fixed costs, as they do not vary with changes in production schedules or output levels.

At a Plant Where a Union Agreement Sets Annual Salaries