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B). If the cost of manufacturing (direct material and direct labour) is 60% of sales and profit is 10% of sales, what would be the improvement in profit if, through better planning and control, the cost of manufacturing was reduced from 60% of sales to 55% of sales? Existing Improvement Sales 100% Cost of 60% manufacturing Other cost 30% Profit C). Using the information in Part A, how much would sales have to increase to, to provide the same increase in profits?

B). If the cost of manufacturing (direct material and direct labour) is 60% of sales and profit is 10% of sales, what would be the improvement in profit if, through better planning and control, the cost of manufacturing was reduced from 60% of sales to 55% of sales? Existing Improvement Sales 100% Cost of 60% manufacturing Other cost 30% Profit C). Using the information in Part A, how much would sales have to increase to, to provide the same increase in profits?

Practical Management Science
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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B). If the cost of manufacturing (direct material and direct labour) is 60% of sales and profit is 10% of sales, what would be the improvement in profit if, through better planning and control, the cost of manufacturing was reduced from 60% of sales to 55% of sales? Existing Improvement Sales 100% Cost of 60% manufacturing Other cost 30% Profit C). Using the information in Part A, how much would sales have to increase to, to provide the same increase in profits?
Transcribed Image Text:B). If the cost of manufacturing (direct material and direct labour) is 60% of sales and profit is 10% of sales, what would be the improvement in profit if, through better planning and control, the cost of manufacturing was reduced from 60% of sales to 55% of sales? Existing Improvement Sales 100% Cost of 60% manufacturing Other cost 30% Profit C). Using the information in Part A, how much would sales have to increase to, to provide the same increase in profits?
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