If Alexi sells 15,000 units per year, how much is the residual income? If Alexi sells 16,000 units per year, what is the return on investment? Suppose the manager of Alexi division desires a return on investment of 22%. In order to achieve this goal, how many units per year Alexi division must sell? Suppose the manager of Alexi division desires an annual residual income of P45,000. In order to achieve this, how many units Alexi division should sell?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 17MC: Waskowski Company sells three products (A. B. and C) with a sales mix of 3:2:1. Unit sales price are...
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Answer 1234 with solution

Alexi Division of Dezi Company makes and sells only one product. Annual data on Alexi division’s single products follows: 

Unit selling price ............................. P50

Unit variable cost ............................. 30

 Total fixed costs .............................P200,000

 Average operating assets ............... 750,000

 Minimum required rate of return ........ 12%

 

  1. If Alexi sells 15,000 units per year, how much is the residual income?
  2. If Alexi sells 16,000 units per year, what is the return on investment?
  3. Suppose the manager of Alexi division desires a return on investment of 22%. In order to achieve this goal, how many units per year Alexi division must sell?
  4. Suppose the manager of Alexi division desires an annual residual income of P45,000. In order to achieve this, how many units Alexi division should sell?
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