QUESTION 21 COST REDUCTION EXAMPLE A Manufacturing company has the following financial information (in millions of \$) \begin{tabular}{|r|r|r|r|} \hline \hline SALES & & 823 & \\ \hline COST OF GOODS SOLD & & & \\ \hline DIRECT LABOR & & 85 & \\ \hline PURCHASED MATERIALS & & 310 & \\ \hline OVERHEAD & & 94 & \\ \hline ALL OTHER COSTS & & 250 & \\ \hline PRE-TAX EARNINGS & & 84 & \\ \hline \hline \multicolumn{1}{|c|}{} & & \\ \hline WHAT IS THE PERCENTAGE INCREASE IN & & \\ EARNINGS FROM AN 8\% SAVINGS IN & & \\ PURCHASING & & \\ \hline \end{tabular} SEE COST REDUCTION EXAMPLE - What is the Percentage Increase to Profit resulting from the 8% Savings in Purchasing? 8% 24.8% 29.5% 2.9%