Investing in plant facilities to boost labor productivity makes economic sense if it reduces which of the following costs?

Investing in plant facilities to enhance labor productivity primarily aims to decrease labor costs per pair produced. This is considered economically sensible because improving productivity often allows a company to produce more output without a corresponding increase in labor expenses.

When plants are upgraded or expanded, efficiencies are gained through automation, better layout designs, or more advanced technology, resulting in more items being produced per labor hour. Therefore, although the total compensation of employees may remain the same, the cost associated with producing each individual item can drop significantly. This reduction in labor costs per pair produced directly contributes to improved profit margins, making it a strategic financial decision.

The other options relate to costs that are not directly influenced by labor productivity improvements. For example, total employee compensation might stay steady or even rise, depending on company policies and market conditions. Similarly, raw material and energy costs are affected by different factors, such as supplier pricing and energy efficiency, rather than productivity enhancements in labor specifically. Therefore, improving labor costs per pair produced is the most relevant metric for justifying investments in plant facilities aimed at boosting productivity.