D. They sometimes result in significant cost savings but are likely to create labor-relations
problems for the company.
E. They may seem to managers to be relatively easy to implement compared with other
kinds of changes managers might consider.
PREP2012-Pack1-RC-005-03 VRC000361-04 Easy
The primary purpose of the passage is to
A. describe a common practice used by managers to control labor costs
B. examine the relation between labor costs and other costs incurred by businesses
C. explain why labor rates are a more significant factor than labor costs for most businesses
D. dentify a common misperception held by managers and point out some of the reasons for
its persistence
E. distinguish between a factor that companies can easily control and another that is more
difficult to change
PREP2012-Pack1-RC-005-04 VRC000361-05 Medium
It can be inferred from the passage that the author would be most likely to agree with which of the following statements about compensation?
A. A company's labor costs are not affected by the efficiency of its work processes.
B. High labor rates are not necessarily inconsistent with the goals of companies that want to
reduce costs.
C. It is more difficult for managers to compare their companies’ labor rates with those of
competitors than to compare labor costs.
D. A company whose lab-or rates are high is unlikely to have lower labor costs than other
companies.
E. Managers often use information about competitors’ labor costs to calculate those
companies’ labor rates.
PREP2012-Pack1-RC-005-05 VRC000361-06 Medium The passage suggests that the “myth" mentioned in the highlighted text persists partly because
A. managers find it easier to compare their companies’ labor rates with those of competitors
than to compare labor costs
B. managers tend to assume that labor rates affect their companies’ budgets less than they
actually do
C. managers tend to that labor rates can have an impact on the efficiency of their companies’
work processes
D. the average amount paid to workers differs significantly from one country to another E. many companies fail to rely on compensation consultants when making decisions about
labor rates