Problem - Answer the following question using the Theory of constraints (show all work)

Theory of Constraints Operational Measures Master Key, Inc is a world leader in the manufacturing of a broad line of componllts for the home, ofce and institutional mshings and has a plant located in Los Angeles, CA. The following nancial information of this plant is modied (for obvious reasons) in order to illustrate some of ICC concepts related to nancial and operational measures. Portia! information om Income Statement: Sales Revenue $50,000,000 Cost of Goods Sold (COGS) $35,000,000 (Direct Material = 40%, Labor and overheads = 60%} Selling 8.: Marketing Expenses $ 500,000 General Administrative Expenses $ 2,000,000 Portia! information om Boionca Sheet: Inventory (Direct Material, Work-m-progress and Finished Goods) $10,000,000 Other Assets (Machinery, Computers, Buildings etc.) $25,000,000 Notes: Assume that (i) Direct Material portion of Cost of Goods Sold is about 40%, and (ii) Direct material portion of Inventory as appeared in Balance Sheet is about 50%. Based on the above limited nancial information gathered from Balance Sheet and Income Statement: 1. Calculate following nancial and operational measures as we have discussed in the class: (i) Throughout, (ii) Inventory, (iii) Operating Expenses, (iv) Net Prot, and (v) Retum on Inventory 2. Prepare Throughput Accounting Income Statement Master Key, Inc. is a world leader in the manufacturing of a broad line of components for the home, office and institutional furnishings and has a plant located in Los Angeles, California. The following financial information of this plant is modified (for obvious reasons) in order to illustrate some of TOC concepts related to financial and operational measures. Partial information from Income Statement: Sales Revenue Cost of Goods Sold (COGS) (Direct Material = 40%, Labor and overheads = 60%) $50,000,000 $35,000,000 Selling & Marketing Expenses General Administrative Expenses $ 500,000 $ 2,000,000 Partial information from Balance Sheet: Inventory (Direct Material, Work-in-progress and Finished Goods) Other Assets (Machinery, Computers, Buildings etc.) $10,000,000 $25,000,000 Notes: Assume that (i) Direct Material portion of Cost of Goods Sold is about 40%, and (ii) Direct material portion of Inventory as appeared in Balance Sheet is about 50%. Based on the above limited financial information gathered from Balance Sheet and Income Statement: 1. Calculate following financial and operational measures as we have discussed in the class: (i) Throughout, (ii) Inventory, (iii) Operating Expenses, (iv) Net Profit, and (v) Return on Inventory 2. Prepare Throughput Accounting Income Statement