Answer:Profit-Leverage Effect
Explanation:
The profit-leverage effect refers to the iinfluence of purchasing cost savings with respect to the sales equivalent required to have the same profit impact which also means that if one reduce expenses related to purchasing it will lead to an increase in profit before tax.
With Profit leverage measures, companies can determine how Thier fixed and variable costs can lead to profit.
Thus, The profit leverage of every buisness lies in the Purchasing department who have responsibility to leverage cost savings into profit by reducing operating expenses which is more efficient than increasing sales.
