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Calculate the profit margin

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Problem - SaskAlloy produces a certain type of metallic magnet which is used in making door buzzers.SaskAlloy forecasts a sale of 2,000,000 units of this magnet for 2021. The sale price of the magnet is $3 per unit. Producing each unit of magnet requires $0.6 in labor and $1.5 in material. SaskAlloy has calculated an overhead of $1,500,000 in fixed costs to produce the magnets. The mentioned fixed cost includes various lines including the cost of running a production line, depreciation of the production equipment, renting a warehouse, and transportation.

Calculate the profit margin if SaskAlloy increases the units sold by 20%.

Calculate the profit margin if SaskAlloy reaches an agreement with its metal supplier to reduce the cost of raw material by 10%.

Calculate SaskAlloy's profit margin.

Reference no: EM132864072

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