Which of the following is/are the most important input cost(s) in service industry?a)Materialb)Labourc)Both material and labourd)OverheadsCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

Answer: B. Labour

The most important input cost in the service industry is labour. This is because:

Services are often people-intensive, requiring a significant amount of human interaction and expertise to deliver value to customers.
Labour costs are typically higher in the service industry compared to other industries, as it involves skilled professionals and specialized knowledge.
Unlike manufacturing industries, where material costs can be a significant portion of the overall costs, service industries generally have lower material costs, as they primarily deal with intangible products and offerings.
While overheads such as rent, utilities, and equipment are important, they do not usually outweigh the significance of labour costs in the service industry.

Therefore, labour is the most important input cost in the service industry, as it has the most significant impact on the quality and delivery of services provided to customers.

Answer

Because for providing service there is an only need of a labur...and service do not require raw products..

Answer

Labour as the most important input cost in the service industry

Labor is the most important input cost in the service industry for several reasons:

Skilled labor
Service industries often require highly skilled workers to provide their services, such as doctors, lawyers, consultants, and IT professionals. These skilled workers command higher wages, which can significantly impact the overall cost of providing services.

Training and development
Service industries often invest heavily in training and development programs to ensure that their employees have the necessary skills and knowledge to provide high-quality services. These training programs can be costly and add to the overall labor cost.

Quality of service
The quality of service provided by employees in the service industry can directly impact customer satisfaction and loyalty. Investing in hiring and retaining high-quality employees can be a competitive advantage but also come with a higher cost.

Variable nature of services
In the service industry, labor costs can vary significantly depending on the demand for services. For example, during peak hours or seasons, service providers may need to hire additional staff to meet customer needs, leading to higher labor costs.

Conclusion
Overall, labor is the most important input cost in the service industry due to the specialized skills required, the cost of training and development, the impact on service quality, and the variability in labor costs based on demand.

Similar CA Foundation Doubts

Opening inventory of raw material of a manufacturing concern is Rs. 10,000, Purchase during the year is Rs. 2,00,000, Wages Rs. 50,000, Carriage Rs. 5,000, Factory overheads Rs. 1,25,000 and closing inventory of raw material is Rs. 15,000. The amount to be transferred is

Cost of Raw material consumed rs 100,000, Closing stock of Raw material Rs 30,0 overheads rs 8000, Sales of scrap Rs 3000, selling overheads Rs 10,000. The cost of Opening Work in progress Rs 60,000, Closing Work in progress Rs 15000. Manufac is manufactured goods?

For material supplied from over stock by any of the venture, the correct journal entry will be: (In case of Separate set of books of a joint ventur e)

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