TinRoof, Inc., manufactures and sells a do-it- yourself storage shed kit. In 2016, it reported the following: I Units produced and sold 3,200 I Investment $2,400,000 % Markup percentage on full cost 8% ' Rate of return on investment 12% | Variable cost per unit $500 Required 1. What was TinRoof's operating income in 2016? What was the full cost per unit? What was the selling price? What was the percentage markup on variable cost? 2. TinRoof is considering increasing the annual spending on advertising by $175,000. The managers believe that the investment will translate into a 10% increase in unit sales. Should the company make the investment? Show your calculations.

TinRoof, Inc., manufactures and sells a do-it- yourself storage shed kit. In 2016, it reported the following: I Units produced and sold 3,200 I Investment $2,400,000 % Markup percentage on full cost 8% ' Rate of return on investment 12% | Variable cost per unit $500 Required 1. What was TinRoof's operating income in 2016? What was the full cost per unit? What was the selling price? What was the percentage markup on variable cost? 2. TinRoof is considering increasing the annual spending on advertising by $175,000. The managers believe that the investment will translate into a 10% increase in unit sales. Should the company make the investment? Show your calculations.

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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