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Question

Because of automation, which component of product cost is declining?

A
Direct labour
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B
Direct materials
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C
Manufacturing overhead
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D
Advertising
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Solution

The correct option is D Direct labour
Direct labour is the cost of payment to the labour who is engaged in the production activity. Now a days, automation has happening due to innovations and most of the productions are done through machines. Hence , the cost of labour is declining day by day.

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