Swiss Company's budget for the upcoming year projects sales revenues of $900,000, an overallcontribution margin ratio of 40%, total fixed costs of $270,000, and an operating leverage of 4.0.Average operating assets are budgeted at $562,500. Which of the following changes in businessconditions would simultaneously increase Swiss Company's turnover and reduce its margin?O Through better inventory management, Swiss reduces its average inventory balance by $48,000.O Swiss spends $30,000 on an annual advertising campaign that increases sales by 15%. Operating assetsremain unchanged.O Swiss reduces its administrative costs by $9,600 per year by streamlining certain processes to make themmore efficient.At the beginning of the year, Swiss recognizes a book loss of $12,000 on the disposition of obsolete inventorythat had a book value of $12,000.O None of the above

Turnover refers to the amount of sales, that the company has made. Margin refers to the profit that…

Answered: Swiss Company's budget for the upcoming…

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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Violet Sales Corp, reports the year-end information from 2023 as follows: Sales (35,500 units) $284,000 Cost of goods sold 105,000 Gross margin 179,000 Operating expenses 152,000 Operating income $27,000 Violet is developing the 2024 budget. In 2024 the company would like to increase selling prices by 3.5%, and as a result expects a decrease in sales volume of 14%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. What is budgeted sales for 2024?
H1.
Ready Electronics is facing stiff competition from imported goods. Its operating income margin has been declining steadily for the past several years. The company has been forced to lower prices so that it can maintain its market share. The operating results for the past 3 years are as follows: Year 1 Year 2 Year 3 Sales 14,500,000 9,500,000 9,000,000 Operating income 1,200,000 1,145,000 945,000 Average assets 15,000,000 15,000,000 16,750,000 For the coming year, Ready's president plans to install a JIT purchasing and manufacturing system. She estimates that inventories will be reduced by 70% during the first year of operations, producing a 20% reduction in the average operating assets of the company, which would remain unchanged without the JIT system. She also estimates that sales and operating income will be restored to Year 1 levels because of simultaneous reductions in operating expenses and selling prices. Lower selling prices will allow Ready to expand its market share. 1.…
Williams & Sons last year reported sales of $38 million, cost of goods sold (COGS) of $30 million, and an inventory turnover ratio of 5. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 6 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar. $
A. Management has developed a new inventory management system that it projects will reduce company inventory from $15,000,000 at the beginning of the next operating year to $12,000,000 at the end of the next operating year: will cash be generated by inventory or needed to fund inventory? And, by how much? a. $3,000,000 of cash generated by reducing inventory b. $12,000,000 of cash needed to fund inventory c. $254,000 of cash needed to fund the inventory reduction program d. $3,000,000 needed to fund inventory B. Accounts payable are projected to be $300,000 at the beginning of the next operating year and $500,000 at the end of the next operating year: will cash be generated by accounts payable or needed to fund accounts payable? And, by how much? a. $200,000 of cash generated by the increase in accounts payable (borrowed more money) b. $500,000 of cash needed to fund accounts payable c. $200,000 of cash needed to fund accounts payable d. No cash will be…
Williams & Sons last year reported sales of $127 million, cost of goods sold (COGS) of $105 and an inventory turnover ratio of 5. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 7 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Round your answer to the nearest dollar.
ba.1
6
Return on investment, Margin, Turnover Ready Electronics is facing stiff competition from imported goods. Its operating income margin has been declining steadily for the past several years. The company has been forced to lower prices so that it can maintain its market share. The operating results for the past 3 years are as follows. For the coming year, Ready's president plans to install a JIT purchasing and manufacturing system. She estimates that inventories will be reduced by 70 % during the first year of operations, producing a 20% reduction in the average operating assets of the company, which would remain unchanged without the JIT system.She also estimates that sales and operating income will be restored to Year 1 levels because of simultaneous reductions in operating expenses and selling prices. Lower selling prices will allow Ready to expand its market share.(Note : Round all numbers to two decimal places.) Required : 1. Compute the ROI, margin, and turnover for Years 1, 2…
Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets ROI At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: Sales $ 480,000 $ 336,000 The company's minimum required rate of return is 15%. $ 1,400,000 680,000 720,000 440,000 $ 280,000 $ 875,000 Contribution margin ratio Fixed expenses 9. If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year? (Do not round intermediate calculations. Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 37.3 % 80% of sales
please answer do not image.
Solano Company has sales of $520,000, cost of goods sold of $380,000, other operating expenses of $51,000, average invested assets of $1,650,000, and a hurdle rate of 8 percent. Several possible changes that Solano could face in the upcoming year follow. Determine each scenario’s impact on Solano’s ROI and residual income. (Note: Treat each scenario independently.)a. Company sales and cost of goods sold increase by 40 percent. What is the residual income? Thanks

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