1.
:
The margin, turnover, and return on investment (ROI) of the company.
2.
Operating assets: Operating assets refer to those assets which are acquired by the company to support its ongoing business operations. These are the assets that contribute to generating revenue. For instance, cash,
:
The effect of reduction in the average level of inventory on the margin and turnover of the company and computation of the revised return on investment.
3.
Cost saving refers to the benefit realized by the company by reducing the overall spending or cost of conducting a business. Cost saving has a direct impact on the
:
The effect of the cost saving on the margin and turnover of the company and computation of the revised return on investment.
4.
Production costs: Production costs refer to the total costs incurred by an organization in order to manufacture a product or provide a service to the customers. Production cost includes both the direct cost as well as indirect costs. For example, raw materials, labor, general
:
The effect of the purchase of plant and machinery, reduction in production cost on the margin and turnover of the company, and computation of the revised return on investment.
5.
Sales revenue: Sales revenue is the amount earned by the company by selling goods or providing services to the customers. It is determined by multiplying the number of units sold with the selling price per unit. The amount of sales revenue is recorded under the head of gross revenue or net revenue in the income statement.
:
The effect of an increase of 20% in sales on the margin and turnover of the company and computation of the revised return on investment.
6.
Return on Investment or asset: It establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.
:
The effect of scrapped inventory on the margin and turnover of the company and computation of the revised return on investment.
7.
Cash and cash equivalents: Cash and cash equivalents are short-term or current investments that can be converted into a specific amount of cash quickly. An instrument that can be converted into cash within 3 months or less refers to a cash equivalent. In a
:
The effect of reduction in cash on the margin and turnover of the company and computation of the revised return on investment.

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Chapter 11 Solutions
17E MANAGERIAL ACCOUNTING CUSTOM
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- Calculate the overhead allocation rate using direct material cost.arrow_forwardAccurate Answerarrow_forwardHarrison Company reports the following updated cost information for August: • Cost of goods manufactured: $150,000 • Direct materials used: $30,000 • • Work in process inventory, Aug. 1: $25,000 Work in process inventory, Aug. 31: $20,000 Direct labor incurred: $70,000 What is the amount of manufacturing overhead incurred by Harrison Company in August?arrow_forward
- A firm has a degree of operating leverage (DOL) of 4.2. If its profits increase by 3%, what is the percentage change in sales?arrow_forwardNew Visions, Inc. is looking to achieve a net income of 18% of sales. Here's the firm's updated profile: Unit sales price: $12 Variable cost per unit: $7 Total fixed costs: $50,000 What is the level of sales in units required to achieve a net income of 18% of sales? A. 12,500 units B. 15,000 units C. 17,606 units D. 20,000 unitsarrow_forwardSolve this questionsarrow_forward
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