Concord Inc. is the only player in the classy snow shovel market. The variety of shovel designs includes camouflage (both green and pink, of course), snowman, beach, and northern lights. Concord purchases basic aluminum snow shovels from a supplier, applies its durable designs, and sells the shovels for $40 each. Last year, the company generated $52,000 in operating income, based on the following details. Sales volume in units Operating expenses DM cost per unit DL cost per unit Variable-MOH per unit Fixed-MOH per unit 9,500 $87,000 $6.00 $6.00 $8.00 $2.00 This year, the company realizes that its operating expenses will increase by $14,000 and its direct labor costs will increase by 20% per unit. (a) Your Answer What markup percentage on total cost did the company use last year when it generated $52,000 in operating income? (Round answer to 2 decimal places, e.g. 15.25%.) Correct Answer (Used) Markup percentage (b) Your answer is partially correct. ROI Markup percentage 28.38 What markup percentage on total cost will the company need to use this year to generate $123,000 in operating income while increasing sales volume by 40%? If the company's asset base is $1,715,000, what is the ROI earned under this scenario? (Round answers to 2 decimal places, e.g. 15.25%.) % 28.96 % 7.18 %
Concord Inc. is the only player in the classy snow shovel market. The variety of shovel designs includes camouflage (both green and pink, of course), snowman, beach, and northern lights. Concord purchases basic aluminum snow shovels from a supplier, applies its durable designs, and sells the shovels for $40 each. Last year, the company generated $52,000 in operating income, based on the following details. Sales volume in units Operating expenses DM cost per unit DL cost per unit Variable-MOH per unit Fixed-MOH per unit 9,500 $87,000 $6.00 $6.00 $8.00 $2.00 This year, the company realizes that its operating expenses will increase by $14,000 and its direct labor costs will increase by 20% per unit. (a) Your Answer What markup percentage on total cost did the company use last year when it generated $52,000 in operating income? (Round answer to 2 decimal places, e.g. 15.25%.) Correct Answer (Used) Markup percentage (b) Your answer is partially correct. ROI Markup percentage 28.38 What markup percentage on total cost will the company need to use this year to generate $123,000 in operating income while increasing sales volume by 40%? If the company's asset base is $1,715,000, what is the ROI earned under this scenario? (Round answers to 2 decimal places, e.g. 15.25%.) % 28.96 % 7.18 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Concord Inc. is the only player in the classy snow shovel market. The variety of shovel designs includes camouflage (both green and
pink, of course), snowman, beach, and northern lights. Concord purchases basic aluminum snow shovels from a supplier, applies its
durable designs, and sells the shovels for $40 each. Last year, the company generated $52,000 in operating income, based on the
following details.
Sales volume in units
Operating expenses
DM cost per unit
DL cost per unit
Variable-MOH per unit
Fixed-MOH per unit
9,500
$87,000
$6.00
$6.00
$8.00
$2.00
This year, the company realizes that its operating expenses will increase by $14,000 and its direct labor costs will increase by 20% per
unit.
Transcribed Image Text:(a)
Your Answer
What markup percentage on total cost did the company use last year when it generated $52,000 in operating income? (Round
answer to 2 decimal places, e.g. 15.25%.)
Correct Answer (Used)
Markup percentage
(b)
Your answer is partially correct.
ROI
Markup percentage
28.38
What markup percentage on total cost will the company need to use this year to generate $123,000 in operating income while
increasing sales volume by 40%? If the company's asset base is $1,715,000, what is the ROI earned under this scenario? (Round
answers to 2 decimal places, e.g. 15.25%.)
%
28.96 %
7.18 %
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