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If a firm is able to sustain the same level of operations in terms of sales and administrative expenses but reduces its materials cost by
If a firm is able to sustain the same level of operations in terms of sales and administrative expenses but reduces its materials cost by $50,000 through smarter purchases, what is the profit-leverage effect on gross profits? a. $50,000
b. $50,000 / SG&A
c. SG&A / $50,000
d. 1 / (SG&A + $50,000)
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