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Calculate Roberto's operating income in both 2010 and 2011. Calculate the growth, price-recovery, and productivity components that explain the change in operat- ing income from 2010 to 2011. Comment on your answers in requirement 2. What does each of these components indicate?

Calculate Roberto's operating income in both 2010 and 2011. Calculate the growth, price-recovery, and productivity components that explain the change in operat- ing income from 2010 to 2011. Comment on your answers in requirement 2. What does each of these components indicate?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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13-18 Strategy, balanced scorecard, merchandising operation. Roberto & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Roberto wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinc- tive Roberto T-shirt. Roberto presents the following data for its first two years of operations, 2010 and 2011. 1 Number of T-shirts purchased 2 Number of T-shirts discarded 3 Number of T-shirts sold (row 1 - row 2) 4 Average selling price 5 Average cost per T-shirt 6 Administrative capacity (number of customers) 7 Administrative costs 8 Administrative cost per customer (row 8 + row 7) 2010 200,000 2,000 198,000 $25.00 $10.00 4,000 $1,200,000 $300 2011 250,000 3,300 246,700 $26.00 $8.50 3,750 $1,162,500 $310 13-19 Strategic analysis of operating income (continuation of 13-18). Refer to Exercise 13-18. 1. Calculate Roberto's operating income in both 2010 and 2011. 2. Calculate the growth, price-recovery, and productivity components that explain the change in operat- ing income from 2010 to 2011. 3. Comment on your answers in requirement 2. What does each of these components indicate?
Transcribed Image Text:13-18 Strategy, balanced scorecard, merchandising operation. Roberto & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Roberto wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinc- tive Roberto T-shirt. Roberto presents the following data for its first two years of operations, 2010 and 2011. 1 Number of T-shirts purchased 2 Number of T-shirts discarded 3 Number of T-shirts sold (row 1 - row 2) 4 Average selling price 5 Average cost per T-shirt 6 Administrative capacity (number of customers) 7 Administrative costs 8 Administrative cost per customer (row 8 + row 7) 2010 200,000 2,000 198,000 $25.00 $10.00 4,000 $1,200,000 $300 2011 250,000 3,300 246,700 $26.00 $8.50 3,750 $1,162,500 $310 13-19 Strategic analysis of operating income (continuation of 13-18). Refer to Exercise 13-18. 1. Calculate Roberto's operating income in both 2010 and 2011. 2. Calculate the growth, price-recovery, and productivity components that explain the change in operat- ing income from 2010 to 2011. 3. Comment on your answers in requirement 2. What does each of these components indicate?
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