Question

gaunlett inc reported the following results from last tears operations

margin of 11 Sales are $320,000, net operating income R e p arating assets are $120,000. What is the company's return on investment ROUP A 25N 119 275 D 2 Gw Corporation produces and sells a single product. Data concerning that product appear below Per Unit Percent of Sales Selling price $220 100% Variable expenses 40% Contribution margin $132 60% 88 Fixed expenses are $511,000 per month. The company is currently selling 5,000 units per month. The marketing manager would like to cut the selling price by $16 and increase the advertising budget by $33,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 800 units. What would be the overall effect on the company's monthly net operating income of this change? A Decrease of $59.800 B Increase of $59.800 C. Increase of $130,200 D. Decrease of $20,200 24. Smythe Corporation has two divisions: North and South. Data from the most recent month appear below: North South Sales Variable expenses Traceable fixed expenses $156,000 49,920 71,000 $221,000 112,710 85,000 The company's common fixed expenses total $64,090. The break-even in sales dollars for South Division is closest to A $250.143 B. $387,059 C. $173,469 D. $304,265 25. If operating income is $60,000, average operating assets are $240,000, and the minimum required rate of return is 20%, what is the residual income? A ($11,000) B. $15,000 C. $12,000 D. $48,000

Answer 1

From the desk of DATE ROI $35200 x 100.2705% $128000 Correct answer is (c) . old SP 220 VC (88) 132 X Sales 5000 unit $ 660000 - PC ( 5llooo) $149000 New 204 (88) 116 5800 $672800 $544000 $12880 0 Net effect . Decrease of $20200 Answer is (D)

From the desk of DATE (24) Brabenen sales - Pixed cost Conni bubon margin $_85000 49% $173469 fou south (c) Answer is Residual income - Netinome (-) Costo equity capital $ 60000 - $48000 2 $12000 Answer is (c) Oddy