On January 1, 2020, Randolph Co $\begin{array} {cc} & \text { Budgeted Break-even Point } & \text { Budgeted Margin of Safety } \\\end{array}$

Multiple Choice

On January 1, 2020, Randolph Co. increased its direct labor wage rates. All other budgeted costs and revenues were unchanged. How did this increase affect Randolph's budgeted break-even point and budgeted margin of safety? (CPA adapted)
$\begin{array} {cc} & \text { Budgeted Break-even Point } & \text { Budgeted Margin of Safety } \\\end{array}$
A. $\begin{array} {cc} &&&& \text { Increase } &&&&&&&&& \text { Increase } \\\end{array}$
B. $\begin{array} {cc} &&&& \text { Increase } &&&&&&&&& \text { Decrease } \\\end{array}$
C. $\begin{array} {cc} &&&& \text { Decrease } &&&&&&&&& \text { Decrease } \\\end{array}$
D. $\begin{array} {cc}&&&& \text { Decrease } &&&&&&&&& \text { Increase } \\\end{array}$

A) Option A
B) Option B
C) Option C
D) Option D