51:48 ces Problem 7-26 Apollo Data Systems is considering a promotional campaign that will increase annual credit sales by $556,000. The company has a 40% cost of goods sold and will require investments in accounts receivable, inventory, and plant and equipment. The turnover for each is as follows: Accounts receivable Inventory Plant and equipment 5x 8x 2x All $556,000 of the sales will be collectible. However, collection costs will be 2 percent of sales, and production and selling costs will be 70 percent of sales. The cost to carry inventory will be 10 percent of inventory. Amortization expense on plant and equipment will be 8 percent of plant and equipment. The tax rate is 30 percent. Inventory is calculated using cost of goods sold and not sales. a. Compute the investments in accounts receivable, inventory, and plant and equipment based on the turnover ratios. What is the total value of the investment made? Accounts receivable Inventory Plant and equipment $ $ Activate Windows Go to Settings to activate Windows

51:48 ces Problem 7-26 Apollo Data Systems is considering a promotional campaign that will increase annual credit sales by $556,000. The company has a 40% cost of goods sold and will require investments in accounts receivable, inventory, and plant and equipment. The turnover for each is as follows: Accounts receivable Inventory Plant and equipment 5x 8x 2x All $556,000 of the sales will be collectible. However, collection costs will be 2 percent of sales, and production and selling costs will be 70 percent of sales. The cost to carry inventory will be 10 percent of inventory. Amortization expense on plant and equipment will be 8 percent of plant and equipment. The tax rate is 30 percent. Inventory is calculated using cost of goods sold and not sales. a. Compute the investments in accounts receivable, inventory, and plant and equipment based on the turnover ratios. What is the total value of the investment made? Accounts receivable Inventory Plant and equipment $ $ Activate Windows Go to Settings to activate Windows

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

CHAPTER 11 PRODUCT PRICING AND PROFIT ANALYSIS 558 41. Casablanca, Inc., has a practical production capacity of two million units, the current year's budget was based on the production and sales of 1.4 million units during the cur- rent year. Actual statistics came out to be: production of 1.44 million units and sales of 1.2 million.. Selling price is at P20 each and the contribution margin ratio is 30%. The peso value that best quantifies the marketing division's failure to achieve budgeted performance for the current year is P4,800,000 unfavorable b. P4,000,000 unfavorable а. P1,440,000 unfavorable d. P1,200,000 unfavorable С. (грера) 42. The differences between the master budget amounts and the amounts in the flexible budget are due to Activity level variances. b. Gaps in affectivity. a. с. Favorable variances. d. Unfavorable variances. (грсра)
Exercise 6-12 (Algo) Multiproduct Break-Even Analysis [LO6-9] Olongapo Sports Corporation distributes two premium golf balls-Flight Dynamic and Sure Shot. Monthly sales and the contribution margin ratios for the two products follow: Product Flight Dynamic Sales CM ratio $ 660,000 Sure Shot $340,000 68% 76% Total $1,000,000 ? Fixed expenses total $567,000 per month. Required: 1. Prepare a contribution format income statement for the company as a whole. 2. What is the company's break-even point in dollar sales based on the current sales mix? 3. If sales increase by $57,000 a month, by how much would you expect the monthly net operating income to increase?
1. Multiplicationtable: (No need the explanation just the answer pls)A manufacturer has invested P750,000 in a new product and wants to set a price to earn a 15 percent ROI. The cost per unit is P18 and the company expects to sell 50,000 units in the first year. The company's target-return price for this product is P ______. a. 18.23 b.20.25 c.20.70 d.18.10 e.25.202. A ballpen manufacturer have the following costs and expected sales: Variable cost P 10.00 Fixed cost P300,000.00Expected unit sales 50,000 Break-even volume will be P______. a. 30,000 b. 35,000 c. 20,000 d. 25,000 3. If the cost of manufacturing a product is P30 and the item sells for P50, the markup percentage is _____ %. a. 67.7 b. 67.6 c. 66.7 d. 66.8
MSRP $5.39 $4.99 Volume Discount 35% 35% Unit Cost $1.49 $1.49 Promotional Allowance 15% 20% Advertising and Promotion $25 Million $20 Million Allocated Fixed Costs $68 M $12 M Projected Unit Sales 115M 10M A firm has an existing product with a combined advertising and promotion budget of $25.0 million and with projected sales of 115 million units. They are launching a new product with a budget of $20.0 million and estimated sales of 10 million units in the first year. The sales force expense of $10 million has been allocated equally between products; 90% of the plant overhead has been allocated to the existing product, and 10%, to the new product. Additional values for each product are shown in the table above. 1. Production anticipates it will need to increase capacity to 140 million units, adding $10.0 million to annual fixed costs. If the product allocation of the plant cost is also changed to 80%/20%, what is the impact on break-even units? Please use the chart…
Rock Solld concrete manufacturers supply cement mixture directly to both the construction Industry and building supply retailers located throughout the country. The company has three machines each with a 100% capacity (60 hours) of 40 tons per week. Due to electricity supply concerns, the machines have only been able to operate at 75% capacity. One ton of cement mixture requires 400 kg of Product M and 600 kg of Product N. Ignore any wastage. Product M is purchased at R80/kg and Product N at R25/kg. Each machine requires five operators. Assume four (4) weeks per month. All materials purchased are used in the mix of cement and all cement is sold in the month it is manufactured. The cement plant takes up 90% of the total floor space. The following is an extract of some of the transactions for the month: NO 1 2 3 4 5 6 TRANSACTION Purchase the required quantity of Product M for the month. Purchase the required quantity of Product N for the month. The machine operators earn R2 000 each per…
es E6-5 (Algo) Calculating Contribution Margin and Contribution Margin Ratio; Identifying Break-Even Point, Target Profit [LO 6-1, 6-2] Sandy Bank, Incorporated, makes one model of wooden canoe. Partial information is given below. Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $600 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 810 canoes for $600 each. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank's break-even point in units and in sales dollars. Sandy Bank sells its canoes for $600 each. 5. Suppose Sandy Bank wants to earn $82,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. Sandy Bank sells its canoes for $600 each. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Complete the following table. Note: Round your "Cost per…
Exercise 6-17 (Algo) Goodwill effect on ROI LO 9 Assume that fast-food restaurants generally provide an ROI of 16%, but that such a restaurant near a college campus has an ROI of 18% because its relatively large volume of business generates an above-average turnover (sales/assets). The replacement value of the restaurant’s plant and equipment is $200,000. If you were to invest that amount in a restaurant elsewhere in town, you could expect a 16% ROI.Required:a-1. Would you be willing to pay more than $200,000 for the restaurant near the campus? multiple choice Yes No a-2. What is the maximum price you would be willing to pay for the business? (Do not round intermediate calculations.) b. If you purchased the restaurant near the campus for $225,000 and the fair value of the assets you acquired was $200,000, identify the account along with its balance, that is used to record the additional amount paid over the fair value of the assets.
Exercise 13-26 (Algo) Estimate Sales Revenues (LO 13-3) Larson, Inc., manufactures backpacks. Last year, it sold 105,000 of its basic model for $20 per unit. The company estimates that this volume represents a 30 percent share of the current market. The market is expected to increase by 10 percent next year. Marketing specialists have determined that as a result of new competition, the company’s market share will fall to 25 percent (of this larger market). Due to changes in prices, the new price for the backpacks will be $17 per unit. This new price is expected to be in line with the competition and have no effect on the volume estimates. Required: Estimate Larson’s sales revenues from this model of backpack for the coming year.
Problem 9-34 Project Evaluation (LO4) The following table presents sales forecasts for Golden Gelt Giftware. The unit price is $40. The unit cost of the giftware is $25. Year 1 2 3 4 Thereafter Unit Sales 25,000 45,000 29,000 5,000 0 It is expected that net working capital will amount to 20% of sales in the following year. For example, the store will need an initial (Year O) investment in working capital of .20 × 25,000 × $40 = $200,000. Plant and equipment necessary to establish the giftware business will require an additional investment of $275,000. This investment will depreciate on the MACRS schedule over 3 years. After 4 years, the equipment will have an economic and book value of zero. The firm's tax rate is 30%. The discount rate is 20%. Use the MACRS depreciation schedule. a. What is the net present value of the project? Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar amount. a. Net present value b. Increase in NPV
Exercise 11-1 (Algo) Compute the Return on Investment (ROI) [LO11-1] Alyeska Services Company, a division of a major oll company, provides various services to the operators of the North Slope oll field in Alaska. Data concerning the most recent year appear below: Sales Net operating income Average operating assets Required: 1. Compute the margin. Note: Round your answer to 2 decimal places. 2. Compute the turnover. $ 17,400,000 $ 4,700,000 $ 35,200,000 Note: Round your answer to 2 decimal places. 3. Compute the return on Investment (ROI). Note: Round your Intermediate calculations and final answer to 2 decimal places. 1. Margin 2. Turnover 3. ROI %
Problem 4-27 (Algo) Percent-of-sales method [LO4-3] Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Cash Accounts receivable. Inventory Current assets Assets Fixed assets Balance Sheet (in 5 millions). Liabilities and Stockholders' Equity $5 Accounts payablet 23 26 $ 54 43 Accrued wages Accrued taxes. Current liabilities Notes payable Common stock Retained earnings. $97 Total liabilities and stockholders equity Answer is complete but not entirely correct. New funds 21 $18 5 11 $34 13 18 32 $ 97 Total assets Owen's Electronics has an aftertax profit margin of 8 percent and a dividend payout ratio of 30 percent. If sales grow by 15 percent next year, determine how…
Exercise 16-36 Payback Period; Uneven Cash Flows (Section 3) (LO 16-1, 16-6, 16-8) Allegience Insurance Company's management is considering an advertising program that would require an initial expenditure of $165,500 and bring in additional sales over the next five years. The projected additional sales revenue in year 1 is $75,000, with associated expenses of $25,000. The additional sales revenue and expenses from the advertising program are projected to increase by 10 percent each year. Allegience's tax rate is 40 percent. (Hint: The $165,500 advertising cost is an expense.) Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Compute the payback period for the advertising program. 2. Calculate the advertising program's net present value, assuming an after-tax hurdle rate of 10 percent. (Round your intermediate and final answers to the nearest whole dollar.) 1. Payback period years 2. Net present value