1.5 Flex Electronics has recorded sales of $20 million in the last year. The company’s spend on the cost of direct material was 55%, direct labor was 15%, and overhead was 25% of sales. What will be the improvement in profit if the cost of direct material is reduced to 50%?

a. What will be the profit before improvement?

b. What will be the profit after improvement?

c. How much will sales have to increase to give the same increase in profit?