Billy Davidson operates Billy’s Worm Firm in Mississippi Davidson raises worms for fishing. He sells a box of 20 worms for $1260. Davidson his invested $400,000 in the worm farm. He hid hoped to earn a 24% annual
Requirements
Billy Davidson his the following questions about the farm’s performance during June
- 1. What is the cost per box of worms sold? (Hint: This is the unit cost of the boxes completed and shipped out of brooding.)
- 2. What it the gross profit per box?
- 3. How much operating income did Billy’s Worm Farm mike in June?
- 4. What is the return on Davidson’s investment of $400,000 for the month of June? (Compute this is June’s operating income divided by Davidson’s $400,000 investment, expressed as a percentage)
- 5. What monthly operating income would provide a 2% monthly rate of return?
What sales price per box would Billy’s Worm Farm have had to charge in June to achieve a 2% monthly rate of return?
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