A. B. and C.

Saved Problem 17-2 (LO 17-1) A service company has the... A service company has the following financial information (in millions of $) Sales Cost of outsourced facilitating goods Cost of in-house services provided Administrative costs Pretax earnings $ 510 210 199 77 24 (Do not round intermediate calculations. Round answers to 1 decimal place.) a. What is the profit leverage effect of reducing the cost of the facilitating goods in this company? Profit leverage 4.7 b. It has been suggested that the in-house services costs could be reduced by 10 percent in the coming year by implementing lean systems. What effect would this have on earnings increase in percentage? Pre-Tex Earnings increases by 21,3% c. What is the profit leverage effect of in-house services relative to profits? Proverage factor 11.6