Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Given the information in the table below and assuming the company's cost & profit structure remains the same, what should a company's revenues be (in
Given the information in the table below and assuming the company's cost & profit structure remains the same, what should a company's revenues be (in USD) in order to match the benefit in profits obtained by a 6% reduction in purchases? (5 pts) (tip: first calculate the new profit level reducing 6% of purchases, then find out the new revenue level with the original profit margin) Element Impact Reducing Purchases Impact Increasing Revenue Organization's Revenue $ 3,500,000 USD ? Purchases $2,800,000 USD Profit (before tax) $ 175,000 USD Pet Reduction in Purchases / Pct increase in Revenue 6% New Profit Level (5) Pct. Increase in Profits $3,750,000 USD $6,860,000 USD $ 7,700,000 USD None of the Above
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started