### Hau Lee Furniture, Inc. Financial Analysis**Background:**Hau Lee Furniture, Inc. is experiencing financial challenges as 45% of its sales revenue is allocated to the supply chain. The current profit of $25,000 is insufficient, prompting the need for a better profit outlook to secure a bank loan for new equipment. The desired profit target is $30,000.**Current Situation Overview:**- **Sales:** $100,000- **Cost of Material:** $45,000 (45%)- **Production Costs:** $20,000 (20%)- **Fixed Costs:** $10,000 (10%)- **Profit:** $25,000 (25%)**Problem Statement:****a) Required Improvement in Supply Chain Strategy:**To achieve a desired profit of $30,000, calculate the percentage decrease needed in material (supply-chain) costs and determine the new cost of material.- **Objective:** Achieve a profit of $30,000.- **Instruction:** Calculate the decrease percentage to one decimal place and provide the new material cost as a whole number.This financial review helps in strategizing cost management to improve profitability and gain loan approval.

First to identify the given data, the sales is $100,000, the given cost of material is 45% of sales…

Answered: a) What percentage improvement is…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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