Hau Lee Furniture, Inc., spends 45% of its sales dollars in the supply chain and finds its current profit of $16,000 inadequate. The bank is insisting on an improved profit picture prior to the approval of a loan for some new equipment. Hau would like to improve the profit line to $21,000 so he can obtain the bank's approval for the loan.

Sales= $80,000

Cost of material= $36,000 (45%)

Production Costs= $16,000 (20%)

Fixed costs= $12,000 (15%)

Profit= $16,000 (20%)

a) What percentage improvement is needed in the supply chain strategy for profit to improve to $21,000?What is the cost of material with a $21,000 profit?

A decrease of ___% in material (supply-chain) costs is required to yield a profit of $21,000, 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.)