Final answer:
Determining the exact percentage improvement needed in the sales strategy requires additional data; however, sales would need to be at least $1,013,000 to achieve an economic profit of $33,000 when including implicit costs, given the current cost structure.
Step-by-step explanation:
To calculate the needed percentage improvement in the sales strategy for profit to improve to $33,000, there are several pieces of information from the chapters that are relevant. From the provided information that the accounting profit is $50,000, we know that the total revenue is $1,000,000 and the explicit costs are $950,000 ($600,000 labor + $150,000 capital + $200,000 materials).
The economic profit is currently $20,000 after accounting for the implicit costs of $30,000. To increase the economic profit to $33,000, an additional $13,000 in profit is required. This increase can come from either an increase in total revenue (sales), a decrease in explicit or implicit costs, or a combination of both. To determine the exact percentage and the new level of sales without information on the cost behavior or the contribution margin is difficult, only approximate estimations can be provided with the given data.
As for the second part, assuming the costs remain the same and additional profit needs to come solely from an increase in sales, the new total sales would need to account for both the desired economic profit of $33,000 and cover all explicit and implicit costs. Hence, if total costs remain at $950,000 (excluding the implicit costs), sales would need to be $983,000 ($950,000 + $33,000) to achieve an accounting profit of $33,000. This reflects an increase in total sales of $983,000 - $1,000,000 = -$17,000, which is actually a decrease. However, to include implicit costs in this calculation and reach an economic profit of $33,000, sales would need to be $1,013,000 ($950,000 + $30,000 implicit cost + $33,000 desired profit), reflecting an increase from the current $1,000,000 sales figure.