Start learning →

Increased automation reduces labour cost but raises which cost?

ARaw material price
BSales commission
CPlant depreciation
DPiece-rate wages
Answer & Solution
Correct answer: C. Plant depreciation
Automation replaces direct labour with machines, so depreciation, an indirect cost, becomes a larger share of total cost.
Practise this question with Quill — CA Inter →

Keep practising Activity Based Costing

Browse all Activity Based Costing questions for CA Inter, or explore more Cost and Management Accounting topics.

Start a Activity Based Costing lesson →
Related questions