Question$/$Problem #$2($fill in the blanks$)$: Back to the financial statementA $5\%$ reduction in direct material costs produces a profit increase of $$\_\_\_\_?$ If the same profit increase had to be increased by sales, what sales increase would you need? At the existing $8\%$ profit margin, the following calculation provides the answer: Profit increase $($plug in the number from the blank above in Question #$2)=$ New sales x $\mathrm{.}08$ New sales $=$ $$\_\_\_\_\_\_$ This represents a needed sales increase of: $($$$\_\_\_\_\_/$$$5,000,000)$ x $100=\_\_\_\_\%$ So$,$ for comparative purposes, in this case study, the same absolute profit improvement can be achieved by reducing material costs by $5\%$ or by increasing sales $\_\_\_\%,$ approximately a ratio of $\_\_\_$ to $1.$