Question: help! you can answer either or both. ill give a thumbs up! 4. ABC Logistics sales are $10 million. The company spends $4 million for
help! you can answer either or both. ill give a thumbs up!
4. ABC Logistics sales are $10 million. The company spends $4 million for direct materials purchases, $3 million for direct labor purchases. Overhead is $2 million and profit is $1 million. Direct labor and direct materials vary with sales, but overhead (fixed costs) does not. The company wants to double its profit. a By how much should the firm increase annual sales? b. By how much should the firm decrease material costs? C. By how much should the firm decrease labor costs? 5. If the cost of manufacturing (direct materials and direct labor) is 65% of sales and profit is 15% of sales, what is the new profit percentage if the direct costs for manufacturing were reduced from 65% to 55%
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