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devry fin 505 week 6 quiz




Question;(TCO D) A company that has a profit can increase its return;on investment by;increasing sales revenue and operating;expenses by the same dollar amount.;increasing average operating assets and;operating expenses by the same dollar amount.;increasing sales revenue and operating;expenses by the same percentage.;decreasing average operating assets and sales;by the same percentage.;Question 2. Question;(TCO D) Given the following;data, what would ROI be?;Sales $50,000;Net operating income $5,000;Contribution margin;$20,000;Average operating assets;$25,000;Stockholder's equity;$15,000;10%;20%;16.7%;80%;Question 3. Question;(TCO D) Last year, the House;of Orange had sales of $826,650, net operating income of $81,000, and operating;assets of $84,000 at the beginning of the year and $90,000 at the end of the;year. What was the company's turnover, rounded to the nearest tenth?;9.5;10.2;9.8;9.2;\;(TCO D) Seebach Corporation has two major business;segments?Apparel and Accessories. Data concerning those segments for June;appear below.;Sales revenues, Apparel $700,000;Variable expenses, Apparel $406,000;Traceable fixed expenses, Apparel $98,000;Sales revenues, Accessories $710,000;Variable expenses, Accessories $312,000;Traceable fixed expenses, Accessories $107,000;Common fixed expenses totaled $292,000 and were allocated as;follows: $155,000 to the Apparel business segment and $137,000 to the Accessories;business segment.;Required;Prepare a segmented income statement in the contribution;format for the company. Omit percentages, show only dollar amounts.;Question 2. Question;(TCO D) Eber Wares is a;division of a major corporation. The following data are for the latest year of;operations.;Sales $30,000,000;Net Operating income $1,170,000;Average operating assets $8,000,000;The company's minimum required rate of return 18%;Required;i. What is the division's margin?;ii. What is the division's turnover?;iii. What is the division's ROI?;iv. What is the division's residual income?;Question 3. Question;(TCO D) Tjelmeland Corporation;is considering dropping product S85U. Data from the company's accounting system;appear below.;Sales $360,000;Variable Expenses $158,000;Fixed Manufacturing Expenses $119,000;Fixed Selling and Administrative Expenses $94,000;All fixed expenses of the company are fully allocated to;products in the company's accounting system. Further investigation has revealed;that $55,000 of the fixed manufacturing expenses and $71,000 of the fixed;selling and administrative expenses are avoidable if product S85U is;discontinued.;Required;i. According to the company's accounting system, what is the;net operating income earned by product S85U? Show your work!;ii. What would be the effect on the company's overall net;operating income of dropping product S85U? Should the product be dropped? Show;your work!;Question 4. Question;(TCO D) Part F77 is used in;one of Wilcutt Corporation's products. The company's Accounting Department;reports the following costs of producing the 7,000 units of the part that are;needed every year.;Per;Unit;Direct Materials $7.00;Direct Labor $6.00;Variable Overhead $5.60;Supervisor's Salary $4.70;Depreciation of Special Equipment $1.50;Allocated General Overhead $5.40;An outside supplier has offered to make the part and sell it;to the company for $28.30 each. If this offer is accepted, the supervisor's;salary and all of the variable costs, including direct labor, can be avoided.;The special equipment used to make the part was purchased many years ago and;has no salvage value or other use. The allocated general overhead represents;fixed costs of the entire company. If the outside supplier's offer were;accepted, only $9,000 of these allocated general overhead costs would be;avoided.;Required;i. Prepare a report that shows the effect on the company's;total net operating income of buying part F77 from the supplier rather than;continuing to make it inside the company.;ii. Which alternative should the company choose?;Question 5. Question;(TCO D) A customer has asked;Clougherty Corporation to supply 4,000 units of product M97, with some;modifications, for $40.10 each. The normal selling price of this product is;$48.00 each. The normal unit product cost of product M97 is computed as;follows.;Direct Materials $18.50;Direct Labor $1.20;Variable manufacturing overhead $8.40;Fixed manufacturing;overhead $3.90;Unit product cost $32.00;Direct labor is a variable cost. The special order would;have no effect on the company's total fixed manufacturing overhead costs. The;customer would like some modifications made to product M97 that would increase;the variable costs by $5.70 per unit and that would require a one-time;investment of $31,000 in special molds that would have no salvage value. This;special order would have no effect on the company's other sales. The company;has ample spare capacity for producing the special order.;Required;Determine the effect on the company's total net operating;income of accepting the special order. Show your work!


Paper#50465 | Written in 18-Jul-2015

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