ROI and RI with manufacturing costs. Superior Motor Company makes electric cars and has only two products,
Question:
ROI and RI with manufacturing costs. Superior Motor Company makes electric cars and has only two products, the Simplegreen and the Superiorgreen. To produce the Simplegreen, Superior Motor employed assets of $13,500,000 at the beginning of the period, and $13,400,000 of assets at the end of the period. Other costs to manufacture the Simplegreen include:
General administration and selling costs total $7,340,000 for the period. In the current period, Superior Motor produced 10,000 Simplegreen cars using 6,000 setup hours and 175,200 machine hours. Superior Motor sold these cars for $12,000 each.
1. Assuming that Superior Motor defines investment as average assets during the period, what is the return on investment for the Simplegreen division?
2. Calculate the residual income for the Simplegreen if Superior Motor has a required rate of return of 12% oninvestments.
Direct materials $3,000 per unit $1,300 per setup hour Setup Production $415 per machine hour
Step by Step Answer:
ROI and RI with manufacturing costs 1 The operating ...View the full answer
Cost Accounting A Managerial Emphasis
ISBN: 978-0136126638
13th Edition
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
Students also viewed these Cost Accounting questions
-
Superior Motor Company makes electric cars and has only two products, the Simplegreen and the Superiorgreen. To produce the Simplegreen, Superior Motor employed assets of $13,500,000 at the beginning...
-
Fabulous Motor Company makes electric cars and has only two products, Simplegreen and Fabulousgreen. To produce Simplegreen, Fabulous Motor employed assets of $ 14,600,000 at the beginning of the...
-
Ohms Motor Company makes electric cars and has only two products, the Simplegreen and the Superiorgreen. To produce the Simplegreen, Ohms Motor employed assets of $13,500,000 at the beginning of the...
-
In a small country near the Baltic Sea, there are only three commodities: potatoes, meatballs, and jam. Prices have been remarkably stable for the last 50 years or so. Potatoes cost 2 crowns per sack...
-
When using the least-squares line for prediction, are results usually more reliable for extrapolation or interpolation?
-
Still concerned about the risk in Problem S11.2, suppose that Phillip is willing to use one local supplier and up to two more located in other territories within the country. This would reduce the...
-
(Financial planning) John is turning 13 today. His birthday resolution is to start saving toward the purchase of a car that he wants to buy on his 18th birthday. The car costs $15,000 today, and he...
-
Drinkwater Company has a choice of two investment alternatives. The present value of cash inflows and outflows for the first alternative is $100,000 and $80,000, respectively. The present value of...
-
k 1 - GST Classifications All supplies fall into the following categories, regardless whether they are inputs or outputs: Taxable (10% rate) GST free (zero rated) Input taxed (no rate) Exempt...
-
Tom Belford and Tony Sorrentino own a small business devoted to kitchen and bath granite installations. Recently, building contractors have insisted on up-front bid prices for a house rather than the...
-
ROI and RI. (D. Kleespie, adapted) The Outdoor Sports Company produces a wide variety of outdoor sports equipment. Its newest division, Golf Technology, manufactures and sells a single product:...
-
Financial and non-financial performance measures, goal congruence. (CMA, adapted) Summit Equipment specializes in the manufacture of medical equipment, a field that has become increasingly...
-
Crawford Beverages manufactures its own soda pop bottles. The bottles are made from polyethylene terephthalate (PET), a lightweight yet strong plastic. Crawford uses as much PET recycled resin...
-
Sylvester C. Dimmick and Lizzie E. Dimmick deeded the land to their three sons, plaintiff, defendant, and Jonathan M. Dimmick, as joint tenants. Jonathan M. Dimmick, in turn, executed a joint tenancy...
-
Consider the following assumption about annual returns to two stock mutual funds \A" and \B." E(rA) = 8%A= 20% E(rB) = 12%B= 30% A,B= 0:2 In addition a one-year T-Bill with face value of $1000 is...
-
Think about a time when you were not a good team member. Why not? What team dynamics might have been in play? Were decisions made in a way that you didn't appreciate? How was communication? If there...
-
Explain Leader-member exchange theory in ICU workplace bullying environment with advantages, and disadvantages of the Leader-Member exchange theory? IDEAS TO PONDER: Outcome of continued exposure to...
-
Amazon.com stock prices gave a realized return of 4 % , - 4 % , 1 1 % , and - 1 1 % over four successive quarters. What is the annual realized return for Amazon.com for the year?
-
The following summary data are from a performance report for Sterling Company for May, during which 9,600 units were produced. The budget reflects the companys normal capacity of 10,000 units. a....
-
B.) What is the approximate concentration of free Zn 2+ ion at equilibrium when 1.0010 -2 mol zinc nitrate is added to 1.00 L of a solution that is 1.080 M in OH - . For [Zn(OH) 4 ] 2- , K f = 4.610...
-
Consider the reaction at 298 K: Calculate G rxn under these conditions: Is the reaction more or less spontaneous under these conditions than under standard conditions? 2 NO(g) + O(8) O(g) 2 NO(8)...
-
Tuff Kids Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans has a selling price of $ 30 with $ 21 in variable costs of goods sold. The company has fixed...
-
Suppose Lattin Corp.s breakeven point is revenues of $1,500,000. Fixed costs are $720,000. Required 1. Compute the contribution margin percentage. 2. Compute the selling price if variable costs are $...
-
Carmel Rugs is holding a 2-week carpet sale at Jeans Club, a local warehouse store. Carmel Rugs plans to sell carpets for $ 1,000 each. The company will purchase the carpets from a local distributor...
-
Provision for Warranty Costs at Tesla Values: Estimated Warranty Costs: $500,000 Actual Warranty Claims: $100,000 Warranty Period: 1 year Requirements: Apply the conservatism principle to estimate...
-
Cost Allocation at Samsung Values: Item Amount Total Overhead $6,000,000 Machine Hours 120,000 Labor Hours 90,000 Requirements: Allocate the overhead costs using machine hours. Allocate the overhead...
-
A company has decided to start a petty cash fund for $ 1 5 0 . Which of the following is the correct journal entry? no entry is required \ table [ [ Expenses , 1 5 0 , ] , [ Petty Cash,, 1 5 0 ] ] \...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App