Question 4 The profit for the year of R.J. Ltd. works out to 12.5% of the capital employed and the relevant figures are as under: Sales... 5,00,000 Direct Materials. 2,50,000 Direct Labour. 1,00,000 Variable Overheads. ..$40,000 Capital Employed.... 44,00,000 The new Sales Manager who has joined the company recently estimates for next year a profit of about 23% on capital employed, provided the volume of sales is increased by 10% and simultaneously there is an increase in Selling Price of 4% and an overall cost reduction in all the elements of cost by 2%. Required - Find out by computing in detail the cost and profit for next year, whether the proposal of Sales Manager can be adopted