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The new chief executive officer (CEO) of Ramirez Manufacturing has asked for a variety of information about the operations of the firm from last year. The CEO is given the following information, but with some data missing: (Click the icon to view the variety of operations information.) Read the requirements. Requirement 1. Find (a) total sales revenue, (b) selling price, (c) rate of return on investment, and (d) markup percentage on full cost for this product. Begin by calculating the (a) total sales revenue. Rearrange the income statement formula to solve for the amount. Sales revenue Requirements 1. Find (a) total sales revenue, (b) selling price, (c) rate of return on investment, and (d) markup percentage on full cost for this product. 2. The new CEO has a plan to reduce fixed costs by $250,000 and variable costs by $0.50 per unit while continuing to produce and sell 500,000 units. Using the same markup percentage as in requirement 1, calculate the new selling price. 3. Assume the CEO Institutes the changes in requirement 2 including the new selling price. However, the reduction in variable cost has resulted in lower product quality resulting in 10% fewer units being sold compared to before the change. Calculate operating income (loss). 4. What concerns, if any, other than the quality problem described in requirement 3, do you see in implementing the CEO's plan? Explain briefly. Data table Total sales revenues ? Number of units produced and sold 500,000 units Selling price ? Operating income $ Total investment in assets $ 225,000 2,500,000 Variable cost per unit $ 2.50 $ 3,250,000 Fixed costs for the year Print Done Print Done

The new chief executive officer (CEO) of Ramirez Manufacturing has asked for a variety of information about the operations of the firm from last year. The CEO is given the following information, but with some data missing: (Click the icon to view the variety of operations information.) Read the requirements. Requirement 1. Find (a) total sales revenue, (b) selling price, (c) rate of return on investment, and (d) markup percentage on full cost for this product. Begin by calculating the (a) total sales revenue. Rearrange the income statement formula to solve for the amount. Sales revenue Requirements 1. Find (a) total sales revenue, (b) selling price, (c) rate of return on investment, and (d) markup percentage on full cost for this product. 2. The new CEO has a plan to reduce fixed costs by $250,000 and variable costs by $0.50 per unit while continuing to produce and sell 500,000 units. Using the same markup percentage as in requirement 1, calculate the new selling price. 3. Assume the CEO Institutes the changes in requirement 2 including the new selling price. However, the reduction in variable cost has resulted in lower product quality resulting in 10% fewer units being sold compared to before the change. Calculate operating income (loss). 4. What concerns, if any, other than the quality problem described in requirement 3, do you see in implementing the CEO's plan? Explain briefly. Data table Total sales revenues ? Number of units produced and sold 500,000 units Selling price ? Operating income $ Total investment in assets $ 225,000 2,500,000 Variable cost per unit $ 2.50 $ 3,250,000 Fixed costs for the year Print Done Print Done

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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am. 117.

The new chief executive officer (CEO) of Ramirez Manufacturing has asked for a variety of information about the operations of the firm from last year. The CEO is given the following information, but with some data missing: (Click the icon to view the variety of operations information.) Read the requirements. Requirement 1. Find (a) total sales revenue, (b) selling price, (c) rate of return on investment, and (d) markup percentage on full cost for this product. Begin by calculating the (a) total sales revenue. Rearrange the income statement formula to solve for the amount. Sales revenue Requirements 1. Find (a) total sales revenue, (b) selling price, (c) rate of return on investment, and (d) markup percentage on full cost for this product. 2. The new CEO has a plan to reduce fixed costs by $250,000 and variable costs by $0.50 per unit while continuing to produce and sell 500,000 units. Using the same markup percentage as in requirement 1, calculate the new selling price. 3. Assume the CEO Institutes the changes in requirement 2 including the new selling price. However, the reduction in variable cost has resulted in lower product quality resulting in 10% fewer units being sold compared to before the change. Calculate operating income (loss). 4. What concerns, if any, other than the quality problem described in requirement 3, do you see in implementing the CEO's plan? Explain briefly. Data table Total sales revenues ? Number of units produced and sold 500,000 units Selling price ? Operating income $ Total investment in assets $ 225,000 2,500,000 Variable cost per unit $ 2.50 $ 3,250,000 Fixed costs for the year Print Done Print Done
Transcribed Image Text:The new chief executive officer (CEO) of Ramirez Manufacturing has asked for a variety of information about the operations of the firm from last year. The CEO is given the following information, but with some data missing: (Click the icon to view the variety of operations information.) Read the requirements. Requirement 1. Find (a) total sales revenue, (b) selling price, (c) rate of return on investment, and (d) markup percentage on full cost for this product. Begin by calculating the (a) total sales revenue. Rearrange the income statement formula to solve for the amount. Sales revenue Requirements 1. Find (a) total sales revenue, (b) selling price, (c) rate of return on investment, and (d) markup percentage on full cost for this product. 2. The new CEO has a plan to reduce fixed costs by $250,000 and variable costs by $0.50 per unit while continuing to produce and sell 500,000 units. Using the same markup percentage as in requirement 1, calculate the new selling price. 3. Assume the CEO Institutes the changes in requirement 2 including the new selling price. However, the reduction in variable cost has resulted in lower product quality resulting in 10% fewer units being sold compared to before the change. Calculate operating income (loss). 4. What concerns, if any, other than the quality problem described in requirement 3, do you see in implementing the CEO's plan? Explain briefly. Data table Total sales revenues ? Number of units produced and sold 500,000 units Selling price ? Operating income $ Total investment in assets $ 225,000 2,500,000 Variable cost per unit $ 2.50 $ 3,250,000 Fixed costs for the year Print Done Print Done
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