Question

Hau Lee​ Furniture, Inc., spends 45 ​% of its sales dollars in the supply chain and finds its current profit of ​$35,000 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 ​$40,000 so he can obtain the​ bank's approval for the loan.

Current Situation
Sales $140,000  
Cost of material $63,000 (45%)
Production cost $21,000 (15%)
Fixed cost $21,000 (15%)
Profit $35,000 (25%)
A)
What percentage improvement is needed in the supply chain strategy for profit to improve to $40,000​? What is the cost of material with a ​$40,000 ​profit?

A decrease of ..........% in material​ (supply-chain) costs is required to yield a profit of ​$40,000 for a new material cost of ............? . (Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole​ number.)
B)
WHAT Percentage improvement is needed in the sales strategy for profit to improve to $40,000? what must sales be for profit to improve to $40,000?

an increase of .........% in sales is required to yield a profit of $ 40,000 , for a new level of sales of $......

Answer 1