Hau Lee Furniture, Inc., spends 45% of its sales dollars in the supply chain and finds its current profit of $21,000 inadequate. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Hau would like to improve the profit line to $26,000 so he can obtain the bank's approval for the loan.

Current Situation Sales $140,000 Cost of material $63,000 (45%) Production cost $35,000 (25%) Fixed cost $21,000 (15%) Profit $21,000 (15%)

What percentage improvement is needed in the supply chain strategy for profit to improve to $26,000? What is the cost of material with a $26000 profit?

A decrease of ?% in material (supply-chain) costs is required to yield a profit of $26000, for a new material cost of ? . (Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.)