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Below is a\ "Return on Asets Model \" which shows the effect of cost reduction on the compass in other aspects of the organization Determine the blank figures in the diagram below according to the data and information provided and in the following footnotes. In the case of Total Conts, indicate what portion corresponds to the purchase costs (Purchase Conts) and to Other Costs before and after the implementation of the strategy to reduce the cost of purchases. Return on Assets (ROA) Model Sales $875,000 Divided by Investment turnover time Total Assets Inventory $437,500 times ROA (S ($ Multiplied by Sales S875,000 Profit $43,750 Minus Profit Total Cost Divided by (S Margin ($. Sales S875,000 %) The inventory (Inventory) represents approximately 25% of the total assets (Total Amets) of the company. The cost of purchases (Purchases) amounts to 45% of total sales. Figures in parentheses () assume a 15% compa cost reduction strategy. Assume that the organization's inventory is reduced in the same proportion that the cost of purchases (Purchases) has been reduced. Indicate the components of Total Costs, or saa, Purchase Costs and Other Costs, before and after the implementation of the purchasing cost reduction strategy. Purchase Costs: Other Conta: Before: Purchase Conta: After: Other Costs: 2 VALUE OF THIS Below is a\ "Return on Asets Model \" which shows the effect of cost reduction on the compass in other aspects of the organization Determine the blank figures in the diagram below according to the data and information provided and in the following footnotes. In the case of Total Conts, indicate what portion corresponds to the purchase costs (Purchase Conts) and to Other Costs before and after the implementation of the strategy to reduce the cost of purchases. Return on Assets (ROA) Model Sales $875,000 Divided by Investment turnover time Total Assets Inventory $437,500 times ROA (S ($ Multiplied by Sales S875,000 Profit $43,750 Minus Profit Total Cost Divided by (S Margin ($. Sales S875,000 %) The inventory (Inventory) represents approximately 25% of the total assets (Total Amets) of the company. The cost of purchases (Purchases) amounts to 45% of total sales. Figures in parentheses () assume a 15% compa cost reduction strategy. Assume that the organization's inventory is reduced in the same proportion that the cost of purchases (Purchases) has been reduced. Indicate the components of Total Costs, or saa, Purchase Costs and Other Costs, before and after the implementation of the purchasing cost reduction strategy. Purchase Costs: Other Conta: Before: Purchase Conta: After: Other Costs: 2 VALUE OF THIS
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