Differentiate between the three major organizational forms. Examine the advantages and disadvantages of each form and discuss some of the critical factors that might lead you to choose one form over the other.
January 5, 2018
ABC Co. purchases an item. The annual demand for this is 75000 unites. The ordering cost is $60 per order. The holding cost is $4 per unit per year. The lead time for this item is 3 days. Assume 250 working days per year.
January 5, 2018

If sales increase by 15% from 2013 to 2014, how much net operating income will the company earn in 2014?  5. Assume that total assets decreased from $14,000,000 to $10,000,000 during 2013.

Stanley appliances producewashing machines and dryers. The company’s external income statements for the last two years are given below:
2012 2013 2014?
Units Sold 150,000 195,000
Sales Revenue
$ 2,160,000
$ 2,700,000
Cost of Goods Sold 1,358,000 1,718,000
Gross Margin 802,000
982,000

S, G & A 210,000 210,000
Net Operating Income $ 592,000 $ 772,000
The company has no beginning or ending inventories. Manufacturing costs are mixed, while S,G&A costs are strictly fixed.
Required:
1. Use the “high-low” method to estimate the variable manufacturing cost per unit and the total fixed manufacturing cost.
Variable Mfg. cost per unit =
Total Fixed Mfg. costs =
2. How much total contribution margin was earned in 2012 year?
3. What was the degree of operating leverage in 2013?
4. If sales increase by 15% from 2013 to 2014, how much net operating income will the company earn in 2014?
5. Assume that total assets decreased from $14,000,000 to $10,000,000 during 2013. The company’s minimum acceptable rate of return is 6%. Compute the following for 2013:
Return on Sales =
Investment Turnover =
Return on Investment =
Residual Income =

 

"Are you looking for this answer? We can Help click Order Now"