(TCO D) Which of the following performance measures will decrease if there is an increase in the accounts receivable?<\/p>\n
ACCT505 Week6 Quiz2<\/p>\n
1. (TCO D) Which of the following performance measures will decrease if there is an increase in the accounts receivable?
\nReturn on Investment Residual Income
\n(A) Yes Yes
\n(B) No Yes
\n(C) Yes No
\n(D) No No
\n(Points : 5)<\/p>\n
Choice A Choice B Choice C Choice D<\/p>\n
2. (TCO D) Given the following data, what would ROI be? (Points : 5)
\nSales $50,000
\nNet operating income $5,000
\nContribution margin $20,000
\nAverage operating assets $25,000
\nStockholder’s equity $15,000<\/p>\n
10% 20% 16.7% 80%<\/p>\n
3. (TCO D) Given the following data: What is the return on investment (ROI)?
\nSales $150.000
\nNet operating income $15,000
\nContribution margin $30,000
\nAverage operating assets $50,000
\nStockholder’s equity $100,000
\n(Points : 5)<\/p>\n
10% 15% 60% 30%<\/p>\n
Page 2
\nQuestion 1.
\n(TCO D) Data for December concerning Dinnocenzo Corporation’s two major business segments-Fibers and Feedstocks-appear below:<\/p>\n
Sales revenues, Fibers $870,000
\nSales revenues, Feedstocks $820,000
\nVariable expenses, Fibers $426,000
\nVariable expenses, Feedstocks $344,000
\nTraceable fixed expenses, Fibers $148,000
\nTraceable fixed expenses, Feedstocks S156,000<\/p>\n
Common fixed expenses totaled $314,000 and were allocated as follows: $129,000 to the Fibers business segment and $185,000 to the Feedstocks business segment.
\nRequired:<\/p>\n
Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts. (Points : 15)<\/p>\n
Question 2. (TCO D) Eber Wares is a division of a major corporation. The following data are for the latest year of operations.
\nSales $30,000,000
\nNet Operating income $1,170,000
\nAverage operating assets $8,000,000
\nThe company’s minimum required rate of return 18%<\/p>\n
Required:
\ni. What is the division’s margin?
\nii. What is the division’s turnover?
\niii. What is the division’s ROI?
\niv. What is the division’s residual income? (Points : 15)<\/p>\n
Question 3. (TCO D) The management of Drummer Corporation is considering dropping product D84L. Data from the company’s accounting system appear below.
\nSales $800,000
\nVariable Expenses $440,000
\nFixed Manufacturing Expenses $248,000
\nFixed Selling and Administrative Expenses $184,000<\/p>\n
All fixed expenses of the company are fully allocated to products in the company’s accounting system. Further investigation has revealed that $201,000 of the fixed manufacturing expenses and $156,000 of the fixed selling and administrative expenses are avoidable if product D84L is discontinued.
\nRequired:<\/p>\n
What would be the effect on the company’s overall net operating income if product D84L were dropped? Should the product be dropped? Show your work! (Points : 15)<\/p>\n
Question 4. 4. (TCO D) Rosiek Corporation uses part A55 in one of its products. The company’s accounting department reports the following costs of producing the 4,000 units of the part that are needed every year.
\nPer Unit
\nDirect Materials $2.80
\nDirect Labor $6.30
\nVariable Overhead $8.50
\nSupervisor’s Salary $2.60
\nDepreciation of Special Equipment $6.80
\nAllocated General Overhead $6.10<\/p>\n
An outside supplier has offered to make the part and sell it to the company for $32.30 each. If this offer is accepted, the supervisor’s salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier’s offer were accepted, only $4,000 of these allocated general overhead costs would be avoided. In addition, the space used to produce part A55 could be used to make more of one of the company’s other products, generating an additional segment margin of $26,000 per year for that product.<\/p>\n
Required:<\/p>\n
i. Prepare a report that shows the effect on the company’s total net operating income of buying part A55 from the supplier rather than continuing to make it inside the company.
\nii. Which alternative should the company choose? (Points : 15)<\/p>\n
Question 5. (TCO D) Biello Co. manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 15,000 medals each month; current monthly production is 14,250 medals. The company normally charges $115 per medal. Cost data for the current level of production are shown below.
\nVariable Costs
\nDirect Materials $969,000
\nDirect Labor $270,750
\nSelling and Administrative $270,075
\nFixed Costs
\nManufacturing $370,550
\nSelling and Administrative $89,775<\/p>\n
The company has just received a special one-time order for 600 medals at $102 each. For this particular order, no variable selling and administrative costs would be incurred. This order would also have no effect on fixed costs.<\/p>\n
Required:<\/p>\n
Should the company accept this special order? Why? (Points : 15)<\/p>\n","protected":false},"excerpt":{"rendered":"
(TCO D) Which of the following performance measures will decrease if there is an increase in the accounts receivable? ACCT505 Week6 Quiz2 1. (TCO D) Which of the following performance measures will decrease if there is an increase in the Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-240312","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/240312","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=240312"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/240312\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=240312"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=240312"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=240312"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}