Simple enough. So, look at this example: From $1 Million to $1.05 Million (this is a 5% increase in sales, you see that, right?) (DM, DL, and OH): From $900K to $945K (5% increase in your costs, you see that, right?) (Revenue COGS): Was - $100K ($1M - $900K = $100K in profit) Now - $105K ($1.05M - $945K = $105K in profit) = (5% increase in profit from a 5% increase in sales) More simply stated: $1 Million $1.05 Million (5% increase): $900K $945K (5% increase): $100K $105K (5% increase) However, reducing Costs of Goods Sold (COGS) is much more powerfulWhat would these answers be if you cut COGS by 5% and sales did not change (fill in the question mark blanks below)?Homework Section:: $1 Million (No change), here are the 5 HW blanks (cut this by 5%): From $900K to $_____?K (5% reduction in COGS = $___?K): Goes from $100K to $_____?KThats a _____?% increase in profit from your original $100K in profit! I would need _____?% more sales to increase my profit by that much. Hint, the answer for the last two blanks is the same.