Given the following information, calculate the influence of a 5% savings in material costs on net...

 

Transcribed Image Text:

Given the following information, calculate the influence of a 5% savings in material costs on net income. Current net income: $5,000,000 COGS: $57,000,000 Other costs (non-COGS): $28,000,000 Materials cost: 80% of COGS Given the following information, calculate the ROA with a 5% reduction in material costs. Sales $90,000,000 Current net income: $5,000,000 COGS: $57,000,000 Other costs (non-COGS): $28,000,000 Materials cost: 80% of COGS Current assets: $60,000,000 Inventory: 50% of current assets Current total assets $61,250,000 Given the following information, calculate the influence of a 5% savings in material costs on net income. Current net income: $5,000,000 COGS: $57,000,000 Other costs (non-COGS): $28,000,000 Materials cost: 80% of COGS Given the following information, calculate the ROA with a 5% reduction in material costs. Sales $90,000,000 Current net income: $5,000,000 COGS: $57,000,000 Other costs (non-COGS): $28,000,000 Materials cost: 80% of COGS Current assets: $60,000,000 Inventory: 50% of current assets Current total assets $61,250,000

Answer rating: 100% (QA)

Lets first calculate the influence of a 5 savings in material costs on net income 1 Calculate the cu... View the full answer