Using Table 11.4 LOADING..., determine the sales necessary to equal a dollar of savings on purchases for a company that has:

Table 11.4: Dollars of Additional Sales Needed to Equal $1 Saved through the Supply Chain*

Percent Net Profit of Firm

Percent of Sales Spent in the Supply Chain

30%

40%

50%

60%

70%

80%

90%

2%

$2.78

$3.23

$3.85

$4.76

$6.25

$9.09

$16.67

4%

$2.70

$3.13

$3.70

$4.55

$5.88

$8.33

$14.29

6%

$2.63

$3.03

$3.57

$4.35

$5.56

$7.69

$12.50

8%

$2.56

$2.94

$3.45

$4.17

$5.26

$7.14

$11.11

10%

$2.50

$2.86

$3.33

$4.00

$5.00

$6.67

$10.00

*The required increase in sales assumes that 50% of the costs other than purchases are variable and that half of the remaining costs (less profit) are fixed. Therefore, at sales of $100 (50% purchases and 2% margin), $50 are purchases, $24 are other variable costs, $24 are fixed costs, and $2 profit. Increasing sales by $3.85 yields the following:

Purchases at 50%	$ 51.93
Other Variable Costs	24.92
Fixed Cost	24.00
Profit	3.00
	$103.85

Through $3.85 of additional sales, we have increased profit by $1, from $2 to $3. The same increase in margin could have been obtained by reducing supply chain costs by $1.

Part 2

a) A net profit of 8% and spends 70% of its revenue on purchases.In this situation, $1 savings in supply chain is equivalent to increasing the sales by $ to realize the same profit (enter your response to two decimal places).