Newton Building Supplies hopes to generate an extra $4 million in sales next year. A salesperson traditionally generates $800,000 in sales each year. Using ratio analysis, how many new salespeople should Newton hire?

Question

Quizplus · Accepted Answer

B)Ratio analysis is used to make a forecast in this case based on the number of salespeople and sales volume. Four million in sales divided by the $800,000 generated by each salesperson indicates that 5 extra salespeople should be hired by Newton.

Newton Building Supplies Hopes to Generate an Extra $4 Million