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.
Frequently asked questions
What is the correct answer to this question?
The actual labour cost will be underestimated
Why is this the correct answer?
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.
Which subject and chapter does this question cover?
This is a Class 11 Home Science question. Chapter: Work, Livelihood and Career. Topic: Traditional occupations in India - Indian cuisine.
