If labor is 20 percent and materials 80 percent of COGS-say $20 and $80,then a 10 percent reduction in labor costs yields $18 added to $80 totals $98.This produces a 2 percent reduction in total costs [i.e.,(100 - 98)/100 = 0.02].Make the same comparison for a 20 percent reduction in materials costs.

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The Answer of If labor is 20 percent and materials 80 percent of COGS-say $20 and $80,then a 10 percent reduction in labor costs yields $18 added to $80 totals $98.This produces a 2 percent reduction in total costs [i.e.,(100 - 98)/100 = 0.02].Make the same comparison for a 20 percent reduction in materials costs.

If Labor Is 20 Percent and Materials 80 Percent of COGS-Say