Question: Cost breakdown problem: A supplier indicates a 20% increase in labor costs and demands a 20% increase in purchasing price. What is the current purchasing

Cost breakdown problem: A supplier indicates a 20% increase in labor costs and demands a 20% increase in purchasing price. What is the current purchasing price? What should be the new purchasing.price? How much increase is this compared to what supplier is asking? Complete the table below. Show your calculations. Recent Cost Breakdown and Price With 20% Increased Labor Material Labor $0.5 $0.5 $1.50 $1.8 Overhead (120% of labor) $1.8 Tooling $0.5 Factory Cost SGA Expense (10% of Factory cost) Total Cost Markup (12% of total cost) Purchasing price $4.3 Requested price 6.35

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