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Titus Comp. produces lamps and mirrors




Question;Titus Comp. produces lamps and mirrors. The company's external income statements for the last two years are given below:2012 2013 2014?Units Sold 145,000 185,000Sales Revenue $ 2,160,000 $ 2,700,000Cost of Goods Sold 1,358,000 1,718,000Gross Margin 802,000 982,000S, G & A 210,000 210,000Net Operating Income $ 592,000 $ 772,000The company has no beginning or ending inventories. Manufacturing costs are mixed, whileS,G&A costs are strictly fixed.Required:1. Use the ?high-low? method to estimate the variable manufacturing cost per unit and thetotal fixed manufacturing cost.Variable Mfg. cost per unit (2 points) =Total Fixed Mfg. costs (2 points) =2. How much total contribution margin was earned in 2012 year (3 points)?3. What was the degree of operating leverage in 2013 (3 points)?4. If sales increase by 10% from 2013 to 2014, how much net operating income will thecompany earn in 2014 (2 points)?5. Assume that total assets decreased from $15,000,000 to $10,000,000 during 2013. Thecompany?s minimum acceptable rate of return is 5%. Compute the following for 2013 (4points):Return on Sales =Investment Turnover =Return on Investment =Residual Income =


Paper#42000 | Written in 18-Jul-2015

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