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General Mattress (GM) Company makes high-end mattresses. The company's cost of goods sold (COGS) includes direct materials, direct labor, depreciation on production equipment, and factory
General Mattress (GM) Company makes high-end mattresses. The company's cost of goods sold (COGS) includes direct materials, direct labor, depreciation on production equipment, and factory rent. The company's selling, general, and administrative (SG\&A) costs include sales office rent, sales staff salaries, and sales commissions. When sales volume increases by 15% in the short term, which of the following is true for the company's total COGS and total SG\&A costs? (hint: DM is a variable cost and rent is a fixed cost) COGS = no change; SG\&A = increase by 15% COGS = increase by 15%; SG\&A = no change COGS = no change; SG\&A = no change COGS = increase by 15%;SG&A= increase by 15% not enough information
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