Use the following information to determine the changes in the following: cost of service failures (including invoice discount, rehandling cost, lost sales), and net income, and Return on Assets. Average price per order $125 Gross margin per order $42 Annual orders 80,000 Of orders not filled correctly Rectified orders 70% With invoice discount $25 With additional handling $15 Orders refused 20%
Use the following information to determine the changes in the following: cost of service failures (including invoice discount, rehandling cost, lost sales), and net income, and Return on Assets. Average price per order $125 Gross margin per order $42 Annual orders 80,000 Of orders not filled correctly Rectified orders 70% With invoice discount $25 With additional handling $15 Orders refused 20%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Use the following information to determine the changes in the following: cost of service failures (including invoice discount, rehandling cost, lost sales), and net income, and Return on Assets.
Average price per order $125
Gross margin per order $42
Annual orders 80,000
Of orders not filled correctly
Rectified orders 70%
With invoice discount $25
With additional handling $15
Orders refused 20%
Warehousing cost $250,000
Other operating costs $650,000
Cash $1,000,000
Accounts receivable $500,000
Fixed assets $10,000,000
Tax rate 40%
Transportation cost $350,000
Average inventory $700,000
Interest cost $400,000
Inventory Carrying Cost 10% per year
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