Nov 23, 2024
NTR 100 COMPLETE Syllabus and Academic Integrity Acknowledgement Arizona State University
NTR 100 COMPLETE Syllabus and Academic Integrity Acknowledgement Question 1 1 / 1 pts I have read the ASU ā¦
Kirk Co. manufactures mobile cellular equipment and develops a price for the product by using a variable cost concept. Kirk incurs variable costs of $1,900,000 in the production of 100,000 units. Fixed costs total $50,000. The company employs $4,725,000 of assets and wishes to earn a profit equal to a 10% rate of return on assets.
a. Compute a markup percentage based on the variable costs concept. Round your answer to one decimal place.
27.5
%
b. Determine a selling price. Round your answer to two decimal places.
24.23
$
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Kirk Co. manufactures mobile cellular equipment and develops a price for the product by using a variable cost concept. Kirk incurs variable costs of $1,900,000 in the production of 100,000 units. Fixed costs total $50,000. The company employs $4,725,000 of assets and wishes to earn a profit equal to a 10% rate of return on assets.
a. Compute a markup percentage based on the variable costs concept. Round your answer to one decimal place.
27.5 % rmine a selling price. Round your answer to two decimal places.
b. Dete
$ 24.23
Glover Inc. manufactures Product B, incurring variable costs of $15.00 per unit and fixed costs of $70,000. Glover desires a profit equal to a 12% rate of return on assets. Assets of $785,000 are devoted to producing Product B, and 100,000 units are expected to be produced and sold.
a. Compute the markup percentage using the total cost concept.
6
%
b. Compute the selling price of Product B. Round your answer to two decimal places.
16.64
$
Feedback
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Glover Inc. manufactures Product B, incurring variable costs of $15.00 per unit and fixed costs of $70,000. Glover desires a profit equal to a 12% rate of return on assets. Assets of $785,000 are devoted to producing Product B, and 100,000 units are expected to be produced and sold.
a. Compute the markup percentage using the total cost concept.
6 %
Compute the selling price of Product B. Round your answer to two decimal places.
b.
$ 16.64
Calculator
Tidewater Company uses the product cost concept of applying the cost-plus approach to product pricing. The cost and expenses of producing and selling 50,000 units of Product K are as follows:
Variable costs:
Direct materials $5.00
Direct labor 8.50
Factory overhead 2.50
Fixed costs:
Factory overhead $50,000
Selling and administrative expenses 34,000
Selling and administrative expenses Total
Tidewater desires a profit equal to a 10% rate of return on invested assets of $1,285,000. a. Determine the amount of desired profit from the production and sale of Product K.
128,500
$
b. Determine the total manufacturing costs and the cost amount per unit for the production and sale of 50,000 units of Product K.
850,000
Total manufacturing costs $
17
Cost amount per unit $
c. Determine the markup percentage for Product K.
25
%
d. Determine the selling price of Product K. Round your answer to two decimal places.
21.5
$
Feedback
Correct
Tidewater Company uses the product cost concept of applying the cost-plus approach to product pricing. The cost and expenses of producing and selling 50,000 units of Product K are as follows:
Variable costs:
Direct materials $5.00
Direct labor 8.50
Factory overhead 2.50
Selling and administrative expenses
Total
Fixed costs:
Factory overhead $50,000
Selling and administrative expenses 34,000
128500
Tidewater desires a profit equal to a 10% rate of return on invested assets of $1,285,000. a. Determine the amount of desired profit from the production and sale of Product K.
$
b. Determine the total manufacturing costs and the cost amount per unit for the production and sale of 50,000 units of Product K.
850000
Total manufacturing costs $
17.00
Cost amount per unit $
c. Determine the markup percentage for Product K.
25 %
Determine the selling price of Product K. Round your answer to two decimal places.
d.
$ 21.25
Jarvis Company uses the total cost concept of applying the cost-plus approach to product pricing. The costs and expenses of producing and selling 35,000 units of Product E are as follows:
Variable costs:
Direct materials
Direct labor
Factory overhead
Selling and administrative expenses
Total
Fixed costs: $3.00
1.25 0.75
3.00 $8.00
Factory overhead $50,000
Selling and administrative expenses 20,000
Jarvis desires a profit equal to a 14% rate of return on invested assets of $450,000.
a. Determine the amount of desired profit from the production and sale of Product E.
$
b. Determine the total costs and the cost amount per unit for the production and sale of 35,000 units of Product E.
350,000
Total manufacturing costs $
10
Cost amount per unit $
c. Determine the markup percentage for Product E.
%
d. Determine the selling price of Product E. Round your answer to two decimal places.
$
Feedback Correct
Jarvis Company uses the total cost concept of applying the cost-plus approach to product pricing. The costs and expenses of producing and selling 35,000 units of Product E are as follows:
Variable costs:
Direct materials
Direct labor
Factory overhead
Selling and administrative expenses
Total
Fixed costs: $3.00
1.25 0.75
3.00 $8.00
Factory overhead $50,000
Selling and administrative expenses 20,000
Jarvis desires a profit equal to a 14% rate of return on invested assets of $450,000.
63000
a. Determine the amount of desired profit from the production and sale of Product E.
$
b. Determine the total costs and the cost amount per unit for the production and sale of 35,000 units of Product E.
350000
Total manufacturing costs $
10.00
Cost amount per unit $
c. Determine the markup percentage for Product E.
18 %
Determine the selling price of Product E. Round your answer to two decimal places.
d.
$ 11.80
Product J is one of the many products manufactured and sold by Gooble Company. An income statement by product line for the past year indicated a net loss for Product J of $7,250. This net loss resulted from sales of $265,000, cost of goods sold of $186,500, and operating expenses of $85,750. It is estimated that 30% of the cost of goods sold represents fixed factory overhead costs and that 40% of the operating expense is fixed. If Product J is retained, the revenue, costs, and expenses are not expected to change significantly from those of the current year. However, because of the net loss, management is considering the elimination of the unprofitable endeavor. Because of the large number of products manufactured, the total fixed costs and expenses are not expected to decline significantly if Product J is discontinued. Prepare a differential analysis report, dated February 8 of the current year, on the proposal to discontinue Product J.
Gooble Company
Proposal to Discontinue Product J February 8, 20XX
Differential revenue from annual sales of product:
Revenue $
from 265,000
sales Differential cost of annual sales of product:
Variable
130,550
51,450 182,000
cost of $ goods sold Variable operatin g
expense
s Annual
differential
income $
83,000
from sales of Product
J
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Product J is one of the many products manufactured and sold by Gooble Company. An income statement by product line for the past year indicated a net loss for Product J of $7,250. This net loss resulted from sales of $265,000, cost of goods sold of $186,500, and operating expenses of $85,750. It is estimated that 30% of the cost of goods sold represents fixed factory overhead costs and that 40% of the operating expense is fixed. If Product J is retained, the revenue, costs, and expenses are not expected to change significantly from those of the current year. However, because of the net loss, management is considering the elimination of the unprofitable endeavor. Because of the large number of products manufactured, the total fixed costs and expenses are not expected to decline significantly if Product J is discontinued.
Prepare a differential analysis report, dated February 8 of the current year, on the proposal to discontinue Product J.
Gooble Company
Proposal to Discontinue Product J
February 8, 20XX
Differential revenue from annual sales of product:
Revenue
$ 26500
from
0
sales Differential cost of
cost of goods ā
Pull Company is considering the disposal of equipment that is no longer needed for operations. The equipment originally cost $600,000, and accumulated depreciation to date totals $460,000. An offer has been received to lease the machine for its remaining useful life for a total of $300,000, after which the equipment will have no salvage value. The repair, insurance, and property tax expenses during the period of the lease are estimated at $75,800. Alternatively, the equipment can be sold through a broker for $230,000 less a 10% commission. Prepare a differential analysis report, dated June 15 of the current year, on whether the equipment should be leased or sold.
Pull Company
Proposal to Lease or Sell Equipment June 15, 20XX
Net revenue from leasing:
Revenue $
from lease 300,000
lease
Net revenue $
Costs associated 75,800 with the
from 224,200
lease Net revenue from selling:
Sales $
price 230,000
Commissio n expense 23,000 on sale Net
revenue 207,000
selling
Net advantage of $
from
lease 17,200
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Pull Company is considering the disposal of equipment that is no longer needed for operations. The equipment originally cost $600,000, and accumulated depreciation to date totals $460,000. An offer has been received to lease the machine for its remaining useful life for a total of
alternative
$300,000, after which the equipment will have no salvage value. The repair, insurance, and property tax expenses during the period of the lease are estimated at $75,800. Alternatively, the equipment can be sold through a broker for $230,000 less a 10% commission. Prepare a differential analysis report, dated June 15 of the current year, on whether the equipment should be leased or sold.
Pull Company
Proposal to Lease or Sell
Net advantage of
17200
$
lease alternative
FDE Manufacturing Company has a normal plant capacity of 75,000 units per month. Because of an extra large quantity of inventory on hand, it expects to produce only 60,000 units in May. Monthly fixed costs and expenses are $150,000 ($2 per unit at normal plant capacity), and variable costs and expenses are $13 per unit. The present selling price is $25 per unit. The company has an opportunity to sell 5,000 additional units at $14.30 per unit to an exporter who plans to market the product under its own brand name in a foreign market. The additional business is therefore not expected to affect the regular selling price or quantity of sales of FDE Manufacturing Company. Prepare a differential analysis report, dated April 21 of the current year, on the proposal to sell at the special price.
FDE Manufacturing Company
Proposal to Sell to Exporter
April 21, 20XX
Differential revenue from accepting offer:
Revenue from sale
of 5,000 $
additional units at $14.30
Differential cost of accepting offer:
Variable costs and expenses of 5,000 additional units at $13
Differenti $
al income from accepting offer
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Correct
FDE Manufacturing Company has a normal plant capacity of 75,000 units per month. Because of an extra large quantity of inventory on hand, it expects to produce only 60,000 units in May. Monthly fixed costs and expenses are $150,000 ($2 per unit at normal plant capacity), and variable costs and expenses are $13 per unit. The present selling price is $25 per unit. The company has an opportunity to sell 5,000 additional units at $14.30 per unit to an exporter who plans to market the product under its own brand name in a foreign market. The additional business is therefore not expected to affect the regular selling price or quantity of sales of FDE Manufacturing Company. Prepare a differential analysis report, dated April 21 of the current year, on the proposal to sell at the special price.
FDE Manufacturing Company
Proposal to Sell to Exporter
April 21, 20XX
Differential revenue from accepting offer:
Revenue from sale
71500
of 5,000
$
additional units at
$14.30
Differential cost of accepting offer:
Variable 65000
costs and expenses of 5,000
The sales, operating income, and invested assets for each division of Salem Company are as follows:
Sales Operating Income Invested Assets
Division C $4,000,000 $410,000 $3,500,000
Division D 3,500,000 600,000 4,000,000
Division E 2,250,000 780,000 7,000,000
Management has established a minimum rate of return for invested assets of 11%. a. Determine the residual income for each division.
Residual Income
25,000
Division C $
160,000
Division D $
10,000
Division E $
b. Based on residual income, which division is the most profitable? Division D
The sales, operating income, and invested assets for each division of Garner Company are as follows:
Sales Operating Income Invested Assets
Division E $3,000,000 $470,000 $2,500,000
Division F 3,600,000 430,000 2,400,000
Division G 6,000,000 560,000 3,000,000
a. Using the expanded expression, determine the profit margin, investment turnover, and rate of return on investment for each division. Round to one decimal place.
Division E Division F Division G
15.7 % 11.9 % 9.3
Profit margin%
1.2 1.5 2.0
Investment turnover
18.8 % 17.9 % 18.7
Rate of return on investment%
b. Which division is the most profitable as per dollar invested?
Division E
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The sales, operating income, and invested assets for each division of Garner Company are as follows:
Sales Operating Income Invested Assets
Division E $3,000,000 $470,000 $2,500,000
Division F 3,600,000 430,000 2,400,000
Division G 6,000,000 560,000 3,000,000
a. Using the expanded expression, determine the profit margin, investment turnover, and rate of return on investment for each division. Round to one decimal place.
Division E Division F Division G
Profit margin 15.7 % 11.9 % 9.3 %
Investment turnover 1.2 1.5 2.0
Rate of return on investment 18.8 % 17.9 % 18.7 %
b. Which division is the most profitable as per dollar invested?
Division E
