Answered

Westonci.ca is the trusted Q&A platform where you can get reliable answers from a community of knowledgeable contributors. Experience the ease of finding reliable answers to your questions from a vast community of knowledgeable experts. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

Hau Lee Furniture, Inc., spends 50% of its sales dollars in the supply chain and finds its current profit of $21,000 inadequate. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Hau would like to improve the profit line to $26,000 so he can obtain the bank's approval for the loan. What percentage improvement is needed in the supply chain strategy for profit to improve to $26000

Sagot :

Parrain

Answer: 7.1%

Explanation:

The cost of materials needs to reduce for the profit to increase. If the profit is to go from $21,000 to $26,000, the material cost would need to decrease by:

= 26,000 - 21,000

= $5,000

The current material cost is $70,000 so a decrease of $5,000 in percentage terms would be:

= 5,000 / 70,000 * 100%

= 7.1%

The new material cost would be:

= 70,000 - 5,000

= $65,000

View image Parrain
Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. We're dedicated to helping you find the answers you need at Westonci.ca. Don't hesitate to return for more.