Question

Your firm has a ROS of 14.3 percent. The company's goal is to increase sales by $417,963 this year. How much, in dollars, would you have to reduce your logistics costs to provide the same marginal amount of profit?

Answer 1

Answer:

$59, 768.7

Explanation:

The ROS (Return on sales) of a company is a ratio used to evaluate a company's operations to how much profit they make per dollar of sales.

Since the company's goal is to increase sales by $417,963 this year they would need to reduce their logistics cost.

We use the formula

ROS =

Operating profit / (Net sales or expected Net sales)

We therefore substitute the formula:

The Operating profit= ROS X Net sales expected

14.3% x $417, 963 = $59, 768