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 (a) Your Answer 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. 9,500 $87,000 $6.00 $6.00 Markup percentage (b) $8.00 $2.00 Correct Answer (Used) 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%.) Markup percentage Your answer is partially correct. 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 %
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 (a) Your Answer 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. 9,500 $87,000 $6.00 $6.00 Markup percentage (b) $8.00 $2.00 Correct Answer (Used) 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%.) Markup percentage Your answer is partially correct. 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 %
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 4EB: Roper Furniture manufactures office furniture and tracks cost data across their process. The...
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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
(a)
Your Answer
(b)
9,500
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.
$87,000
Markup percentage
$6.00
$6.00
$8.00
$2.00
Correct Answer (Used)
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%.)
Markup percentage
Your answer is partially correct.
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 %
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