Question

As the business grows: A. advertising expenses should go down. B. the pro forma income statement becomes unimportant. C. salaries and wages will go up as output increases. D. selling expenses should go down.

Answer 1

The correct answer is letter "C": salaries and wages will go up as output increases.

Step-by-step explanation:

When companies grow it is because the goods or services being offered are more demanded by a certain sector of the population. Employees will notice this and will start claiming for more benefits as they are part of that economic growth. To avoid internal conflict that could lead to a downturn in revenues, organizations tend to raise their workers' salaries in small increments.