Since labor and other costs greatly exceed outlays for purchased materials and services in most service organizations,supply is of little consequence in most service organizations.

Service Organizations

Businesses that primarily offer intangible products, such as expertise or labor, rather than physical goods.

Purchased Materials

Items or components procured from external sources used in the manufacturing process or for company operations.

Labor Costs

Encompass the total expenses related to employing labor, including wages, benefits, and taxes, significant in determining product pricing and competitiveness.