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Labor and the relationship between costs, revenues and activity

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Please help with the following labor management question.

How does labor affect the relationship between costs, revenues, and activity volume?

Please include references.

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This solution helps with a problem regarding labor and relationship between costs, revenues and activity. The explanation is given in 384 words.

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Problem: How does labor affect the relationship between costs, revenues, and activity volume?

Solution:

The relationship between cost, revenue, and activity volume is important to study for establishing financial results if there is a fluctuation in the specified level of activity or volume. The relationship is impacted by labor in both short run (one year or less) and long run (more than one year). In the short run the output of the firm is restricted to that available from the current operating capacity because in short run some inputs can be increased while others cannot. Hence short term profitability of a firm is most sensitive to sales volume.
When sales volume reaches ...

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