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Question 1.1. (TCO D) Which of the following performance measures will decrease if there is an increase in the accounts receivable

 

Question 2.2. (TCO D) Given the following data, what would ROI be?

Sales

$50,000

Net operating income

$5,000

 

Question 3.3. (TCO D) Last year, the House of Orange had sales of $826,650, net operating income of $81,000, and operating assets of $84,000

 

Q-1 (TCO D) Financial data for Beaker Company for last year appear below.

Beaker Company

Statement of Financial Position

     
 

Beginning

Ending 

 

Balance

Balance

Assets

$2,20,000

$2,40,000

Compute the company’s margin, turnover, and return on investment for last year.

ii. The board of directors of Beaker Company has set a minimum required return of 20%. What was the company’s residual income last year?

Question 2.2. (TCO D) Eber Wares is a division of a major corporation. The following data are for the latest year of operations

i. What is the division’s margin?

ii. What is the division’s turnover?

iii. What is the division’s ROI?

iv. What is the division’s residual income? (Points : 15)

Question 3.3. (TCO D) The management of Drummer Corporation is considering dropping product D84L. Data from the company’s accounting system appear below.

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

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. 

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.

ii. Which alternative should the company choose

Question 5.5. (TCO D) A customer has asked Clougherty Corporation to supply 4,000 units of product M97, with some modifications, for $40.10 each. The normal selling price of this product is $48.00 each. The normal unit product cost of product M97 is computed as follows.

Determine the effect on the company’s total net operating income of accepting the special order. Show your work! (Points : 15)

 

 

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