Question
Company A has 50% of its total variable manufacturing cost in labor and the other 50% in fuel. Company B has 10% of its
Company A has 50% of its total variable manufacturing cost in labor and the other 50% in fuel. Company B has 10% of its total variable manufacturing cost in labor and the remainder in fuel. Suppose in a given year labor costs rise 9% and fuel costs rise 7%. Required: 1. Using the information above, calculate the percentage increase in total variable cost for each company. (Enter your answers as whole percentages rounded to 1 decimal place.) Company A Company B Percentage Increase in Total Variable Costs 2. Which company has the higher percentage increase in total variable cost? O Company A O Company B
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