Respuesta :
Answer:
The improvement in profit would be 100%.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
If the cost of manufacturing (direct material and direct labor) is 60% of sales and profit is 10% of sales, what would be the improvement in profit if, through better planning and control, the cost of manufacturing was reduced from 60% of sales to 50% of sales.
The explanation of the answer is now given as follows:
Given:
Previous cost of manufacturing = 60% of sales
Previous profit = 10% of sales
Current cost of manufacturing = 50% of sales
Therefore, we have:
Previous revenue = Previous cost of manufacturing + Previous profit = 60% + 10% = 70%
Current profit = Previous revenue - Current cost of manufacturing = 70% - 50% = 20%
Improvement in profit = ((Current profit - Previous profit) / Previous profit) * 100 = ((20% - 10%) / 10%) * 100 = (10% / 10%) * 100 = 1 * 100 = 100%
Therefore, the improvement in profit would be 100%.
The improvement in profit would be 100%.
Calculation of an improvement in profit:
Previous revenue
= Previous cost of manufacturing + Previous profit
= 60% + 10%
= 70%
Now
Current profit
= Previous revenue - Current cost of manufacturing = 70% - 50% = 20%
Now finally
Improvement in profit = ((Current profit - Previous profit) / Previous profit) * 100
= ((20% - 10%) / 10%) * 100
= (10% / 10%) * 100
= 1 * 100
= 100%
It is an incomplete question. Kindly find the full question below.
If the cost of manufacturing (direct material and direct labor) is 60% of sales and profit is 10% of sales, what would be the improvement in profit if, through better planning and control, the cost of manufacturing was reduced from 60% of sales to 50% of sales.
Learn more about the profit here: https://brainly.com/question/24086027
