A rough rule of thumb for the chemical industry is that 1$ of annual sales requires 1% of fixed capital investment. In a chemical processing plant where this rule applies, the total capital investment is $5,000,000 and the working capital is 15% of the total capital investment. The annual total product cost amounts to $3,000,000. If the income tax rates on gross earnings total 40%, determine the following: (i) Percent of total capital investment returned annually as gross earnings (ii)Percent of total capital investment returned annually as net

Q: 7. Harris Manufacturing incurs annual fixed costs of $250,000 in producing and selling a single…

A: Fixed cost: Fixed cost refers to those costs that will incur irrespective of the production process.…

Q: The New York division of Ram Co. had the following financial data for 2020: sales $600,000, average…

A: Return on investment means how much net income has been earned on average investment amount.…

Q: The R&B Division of MoTown Recording Corporation defines returns as operating income and had the…

A: Residual incomeformuula = Net operating income - (Average assets * Minimum rate of return)=…

Q: Solano Company has sales of $620,000, cost of goods sold of $430,000, other operating expenses of…

A: Answer:-  Return on investment meaning(ROI):- ROI is a basically a measure of an investment's…

Q: Smirnoff Corp. invested P31,250,000 in a cabinet-making business. It expects to earn a 25% return on…

A: Expected return = amount invested x expected return = 31250000*25% = P7812500

Q: Easy Problems Corp. produces and sells a single product. The selling price is Php 25.00 and the…

A: Contribution=Selling price-Variable cost×Number of units sold=Php. 25-Php. 15×11,000=Php. 110,000

Q: The fixed costs incurred by a automotive shop are $200,000 per year. Variable costs are 60% of the…

A: Formula: Net profit = Revenues - Expenses

Q: Smirnoff Corp. invested P31,250,000 in a cabinet-making business. It expects to earn a 25% return on…

A: solution: Required net income= P31,250,000 * 25% = P7,812,500 Required income per unit = P7,812,500…

Q: The R&B Division of MoTown Recording Corporation defines return as after-tax income and had the…

A: The return on investment is calculated by dividing operating income by the total asset and…

Q: A certain firm has the capacity to produce 650 000 units of a certain product per year. At present,…

A: Capactity - 6,50,000 units Operating capacity - 62% Annual Income PhP 41,95,000 Annual Fixed Costs -…

Q: 16. Smirnoff Corp. invested P31,250,000 in a cabinet-making business. It expects to earn a 25%…

A: Solution: Required income for the year = P31,250,000*25% = P7,812,500 Required net income per unit =…

Q: A company, subject to a 25% tax rate, desires to earn P600,000 of after-tax income.  How much should…

A: Tax rate = 25% Desired earning after tax  = P600,000  Earning before tax shall be added  to fixed…

Q: Magnolia Company's Division A has operating income of $104,200 and assets of $360,800. The minimum…

A: Residual income = Operating income - Operating assets x minimum acceptable return

Q: ity (1000 kg product per year) has an d variable costs are 61 per cent of ne it (ie, profit per kg…

A: Break even point = Fixed cost / Contribution margin

Q: Hydro Systems Engineering Associates, Inc. provides consulting services to city water authorities.…

A: Break even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at…

Q: The enterprise sells products for 52 million per year. Production takes place evenly over 5 working…

A: Operating Cycle is the period which starts from the day where money is going out and ends when the…

Q: (1) Compute the company’s degree of operating leverage. (2) If sales increase by 15%, what amount of…

A: Contribution is usually defined as Sales minus the variable costs of an organization The degree of…

Q: A company manufactures a range of products one of which, product Y, incurs a total cost of $20 per…

A: Difference between the selling price of the product and the cost of the product is called markup.…

Q: Beautyme Ltd has 2 divisions. Division A has a Profit of £350,000 after charging the allocated head…

A: Residual income is a useful metric for evaluating the financial performance of a company because it…

Q: The Western Division of Claremont Company had net operating income of $144,000 and average invested…

A: Return on investment :— It is calculated by dividing net operating income by average total operating…

Q: correlated

A: Covariance can be defined as a statistical tool which helps to understand the relationship that…

Q: Solano Company has sales of $740.000, cost of goods sold of $490,000, other operating expenses of…

A: Return on investment = Net profit/Average invested assets Investment turnover = Net sales/Average…

Q: (Calculating changes in net operating working capital) Faraway Fabricators, Inc., is considering the…

A: Accounts receivable (AR) are the balance of money due to a firm for goods or services delivered or…

Q: Suppose a company has a sale of Rs. 200,000 for the year. The cost structure is given as follows:…

A: Raw material  4931.50 Work in progress 2780.82 Finished goods 6986.30 Debtor  16438.35…

Q: Titan Metalworks produces a special kind of metal ingots that are unique, which allows Titan to…

A: Adding a markup to the cost of goods and services results in a selling price that is known as…

Q: Stark Industries reports that its average operating assets are $511,000,000 and its net operating…

A: Residual income is the income that the firm earns over and above the minimum acceptable return of…

Q: A plant operating at 100% capacity (1000 kg product per year) has an annual net profit of $40,000…

A: Break even point(BEP)= Fixed cost/Contribution per unit Variable cost ratio + Contribution Ratio=…

Q: Mountville's results for the year and the potential new investment are shown below. The new…

A: Residual incomeThe amount of money that continues to be earned after the investment or after the…

Q: m has the capacity to produce 650,000 units of a certain product per year (max capacity). At,…

A: ANSWER: Given-         Annual Fixed Cost =P1,920,000         Variable Cost        =P3.50 Per Unit…

Q: Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is…

A: New sales = Current sales + Current sales x 10% = $11700,000 + $11700,000 x 10% = $12,870,000 New…

Q: The following annual information is for Dexter Corporation:   Product A Revenue per unit: $20.00…

A: Formula: Unit contribution margin = Selling price - Variable cost per unit

Q: Delsing Canning Company is considering an expansion of its facilities. Its current income statement…

A: ParticularsCurrent Income statementSales $    63,00,000.00Less: variable cost $…

Q: 8. A juice bar is currently doing $292,000 a year in sales revenue. Juice cost is 40% and other…

A: 1. Cost of Juice = 40% of sales Revenue = 40% of $ 2,92,000 = $ 1,16,800 2. Other variable cost= 25%…

Q: Last year, Bridgerton Co. had sales of $1,625,000 on the sale of 25,000 units, variable costs of…

A: The break-even sales are the sales where business earns no profit or loss during the period. The…

Q: Stark Industries had sales of 150,000 units at a price of $10 per unit. It faced fixed operating…

A: We have given the sales units and the price per unit. Sales value is sales unit* price per unit. Net…

Q: A food processing plant has fixed charges, overhead, and general expenses equal to $ 3,000,000 and…

A: The objective of the question is to calculate the breakeven production rate and the net profit at…