Based on the cost breakdown analysis described in this chapter, if labor costs increase, which of the following will also increase? a. SGA will increase b. Factory cost will increase c. Manufacturing overhead will increase d. Price will potentially increase e. All of the above will increase

e. All of the above will increase

Explanation:

Labour cost can be defined as the total cost that is used to execute a business. It is always a company's goal to reduce or minimize labour cost because and increased labour cost is as a result of a decrease in productivity.

When an increase in labour cost occurs due to a decrease in productivity, there would be an increase in price, increased factory cost, increase in manufacturing overhead and an increase in SGA.

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