Company C. makes a profit margin of 7%. Assume in 2013 the company had supply chain...

Company C. makes a profit margin of 7%. Assume in 2013 the company had supply chain cost savings of $500,000.

Calculate: -

1. Net Profit

2. Sales

3. Total Costs

Expert Solution

1. Net profit = cost savings = $500000

2. Sales = cost savings( profit) / profit margin = 500000/0.07= $7142857.14

(Profit margin is as the % of sales , let sales = x then, profit = x × profit margin =x × 7/100= 0.07x , so x( sales)= profit /0.7 )

3 cost savings ( profit)= Sales — TC

or, TC = sales — cost savings(profit) = 7142857.14–500000 = $ 6642857.14

Rahul Sunny answered 2 years ago

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