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If family labour is unpaid in a traditional food enterprise, what problem arises in profit analysis?

Answer and explanation

Correct answer: The actual labour cost will be underestimated

Even when family members are not paid wages in cash, their time and work have an economic value. If this labour is excluded, total cost is shown as lower and profit appears higher than the actual profit. Customer count and food safety have no direct link with unpaid family labour. Exam tip: Include the estimated value of both paid and unpaid labour when calculating profit.

Related tags

Traditional Food EnterpriseFamily LabourProfit AnalysisLabour CostHome ScienceCost AccountingTraditional Occupations In India Indian CuisineWorkLivelihood And Career

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