A service company has the following financial information (in millions of $)

A. What is the profit leverage effect of reducing the cost of the facilitating goods in this company?

B. It has been suggested that the in-house services cost could be reduced by 10% in the coming year by implementing lean systems. What effect would this have on earnings increase in percentage?

C. What is the profit leverage effect of in-house services relative to profit?

Sales	510
Cost of outsourced facilitated goods	210
Cost of in-house services provided	199
Administrative costs	77
Pretax earnings	24