Gerogetown Company desires a return on sales (ROS) of 20%. They must find an additional cost reduction of $1,000,000from their current total costs of $9,000,000 assuming no changes in sales. Georgetown's current ROS is

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Georgetown's current ROS is calculated as (Sales - Costs) / Sales. If they want a 20% ROS and need to reduce costs by $1,000,000 from $9,000,000, their current ROS is 10%.

Gerogetown Company Desires a Return on Sales (ROS) of 20