What is the increase in earnings from an 8 percent savings in purchasing?What is the profit leverage effect of purchasing in this company?

OPERATIONS requires the use of quantitative methods to ensure processes are effectively managed. This week we look at several measuring opportunities:

Economic Order Quantity (EOQ)
Bill of Materials (BOM)
Profit Leverage Effect

Chapter 14: Problem 1 (Problems Section: pg. 317-318) Always Fresh Grocery…..
Chapter 15: Problem 4 (Excel template) (Problems Section: pg. 344)Old Hickory….
Chapter 17: Problem 1 (Problems Section: pg. 394) A manufacturing company…….

This is an individual assignment. Please use Excel to complete your quantitative problems

I. A manufachning company has the following financial information:
Sales $823 Cost of goods sold Direct labor 85 Purchased materials 310 Overhead 94 All other costs 250 Pretax earnings 84
a. What is the profit leverage effect of purchasing in this company?

b. What is the increase in earnings from an 8 percent savings in purchasing?

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