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Parkhurst Company manufactures and distributes two types of back braces, adult braces, and pediatric braces to two types of customers, hospitals and physicians. Information on the customers and products is presented below. (Assume operating costs are allocated based upon sales)

-If Parkhurst Company desires a return on sales of 25%, costs must be reduced by:

Question

Use the following to answer questions:
Parkhurst Company manufactures and distributes two types of back braces, adult braces, and pediatric braces to two types of customers, hospitals and physicians. Information on the customers and products is presented below. (Assume operating costs are allocated based upon sales)
 
-If Parkhurst Company desires a return on sales of 25%, costs must be reduced by:

Quizplus · Accepted Answer

To achieve a return on sales of 25%, costs must be reduced in such a way that the resulting profit margin (profit as a percentage of sales) is 25%. Without specific figures for current sales, costs, and profits, we can't calculate the exact amount needed to reduce costs. However, the correct answer is chosen based on the information provided in the question, assuming it requires knowledge of financial ratios and their implications on cost reductions.

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