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what is the change in bonus expected for next year expected to be (assume rest of firm operates same as last year)? Express as a whole number.

what is the change in bonus expected for next year expected to be (assume rest of firm operates same as last year)? Express as a whole number.

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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Mountville's results for the year and the potential new investment are shown below. The new investment is approved and expected to create sales of $100,000, a contribution margin of 70% of sales and added fixed costs of $40,000. If the manager gets a bonus of 10% of Residual income, what is the change in bonus expected for next year expected to be (assume rest of firm operates same as last year)? Express as a whole number. Sales $1,000,000 Variable expenses $300,000 Fixed expenses $500,000 Average operating assets $800,000 Minimum rate of return 6% New investment $268,000
Transcribed Image Text:Mountville's results for the year and the potential new investment are shown below. The new investment is approved and expected to create sales of $100,000, a contribution margin of 70% of sales and added fixed costs of $40,000. If the manager gets a bonus of 10% of Residual income, what is the change in bonus expected for next year expected to be (assume rest of firm operates same as last year)? Express as a whole number. Sales $1,000,000 Variable expenses $300,000 Fixed expenses $500,000 Average operating assets $800,000 Minimum rate of return 6% New investment $268,000
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