Use the 2011 Form 10-K for Black & Decker Corp. (B&D) (not Stanley Black & Decker) to
Question:
■ “General Development of the Business” on pages 3–4.
■ “Consolidated Statement of Operations” on page 65.
Required
a. Calculate the percentage increase in B&D’s sales and its “earnings from continuing operations” from 2010 to 2011.
b. Would fixed costs or variable costs be more likely to explain why B&D’s operating earnings increased by a bigger percentage than its sales?
c. On page 105, B&D reported that it incurred research and development costs of $147.2 million in 2011. If this cost is thought of in the context of the number of units of products sold, should it be considered as primarily fixed or variable in nature?
d. If the research and development costs are thought of in the context of the number of new products developed, should they be considered as primarily fixed or variable in nature?
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Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Old
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