If the cost of manufacturing (direct labor and materials) is 50% of sales and profit is 15% of sales, what would the profit percentage be if the direct costs of manufacturing was reduced from 50% to 47%?
A) 3%
B) 6%
C) 12%
D) 15%
E) 18%

Question

Quizplus · Accepted Answer

Reducing direct costs from 50% to 47% of sales increases profit by 3% (from 15% to 18%) since the saved costs directly add to the profit.

If the Cost of Manufacturing (Direct Labor and Materials) Is