A Regional Grocery Chain Spends 70% of Its Sales in the Supply

question 25

Essay

A regional grocery chain spends 70% of its sales in the supply chain,and has a net profit margin of 2%.They have just initiated an Internet-based inventory management program that is expected to save the chain $500,000 per year.What is the equivalent increase in sales to this saving? Use Table 11.3,reproduced below.

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Definitions:

Dessert Bar

A dessert bar is a specialized establishment focusing on offering a wide variety of desserts, ranging from cakes and cookies to pastries and ice creams.

Departmental Overhead Rate

A method to allocate indirect costs to specific departments based on a predetermined rate.

Mixing Department

refers to a section within a manufacturing facility where ingredients or components are combined to produce a product, vital in industries such as food processing and chemicals.

Direct Labor Hours

The total time workers spend creating a product or service, directly associated with the production process.