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The CEO is not convinced and still thinks that no form of a Deluxe Box, sustainable or not should be produced. The CEO indicates that

The CEO is not convinced and still thinks that no form of a Deluxe Box, sustainable or not should be produced. The CEO indicates that consideration of the production of a Sustainable Deluxe Boxes will only be considered if it can achieve at least the same operating profit percentage for the Sustainable Deluxe Boxes as the operating profit percentage indicated under the ABC costing method for Standard Boxes (See Tab 3) . Required (Complete the grey spaces). 1) How much additional operating profit (in percentage) will be required from the Sustainable Deluxe Boxes to meet the same percentage as the Standard Boxes are generating, given the percentage that can currently be achieved on Sustainable Deluxe Boxes
Using Operating Profit % Using Gross Profit %
Required profit 46% See Question 1
Subtract: Existing profit 32% See Q 1 above
Equals: Difference in additional profit required 14%

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