FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Precise Machining has
A. |
decreased by $80,000. |
|
B. |
increased by $80,000. |
|
C. |
increased by $125,000. |
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- A firm operated at 80% of capacity for the past year, during which fixed costs were $201,000, variable costs were 61% of sales, and sales were $919,000. Operating profit was a.$358,410 b.$157,410 c.$125,928 d.$560,590arrow_forwardp4-4arrow_forwardA firm operated at 80% of capacity for the past year, during which fixed costs were $190,000, variable costs were 65% of sales, and sales were $976,000. Operating profit was a. $151,600 Ob. $634,400 OC. $121,280 d. $341,600 ?arrow_forward
- The following information is available for Fairmount Industries from year 1 operations: Sales revenue (58,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs Operating profits (losses) $ 1,685,000 $ 253,000 558,000 340,000 173,000 184,000 54,000 175,000 21,500 $ 1,758,500 $ (73,500) All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $35,000 will be fully depreciated by the end of year 1 and will not be replaced with new equipment because it is still operating to specification. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a per-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs will increase by 4 percent. Fixed cash…arrow_forwardThe following information is available for ABC Industries from year 1 operations: Sales revenue (65,000 units) $ 1,735,000 Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) 4 Administrative depreciation. Total costs Operating profits (losses) $ 260,000 565,000 347,000 180,000 191,000 61,000 182,000 25,000 $ 1,811,000 $ (76,000) All depreciation charges are fixed. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a per-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs will increase by 4 percent. Fixed cash manufacturing costs are expected to increase by 12 percent. Variable marketing costs will change with volume. Administrative cash costs are expected to decrease by 15 percent. Inventories are kept at zero. Fairmount…arrow_forwardThe Western Division of Claremont Company had net operating income of $154,000 and average invested assets of $557,000. Claremont has a required rate of return of 14.75 percent. Western has an opportunity to increase operating income by $48,000 with a $84,000 investment in assets. Compute Western Division's return on investment and residual income currently and if it undertakes the project. Note: Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%). Round your Residual Income (Loss) answers to the nearest whole dollar. Return on Investment (ROI) Residual Income (Loss) Current % Proposed Projectarrow_forward
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