Question

In: Accounting

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                                                               $

Sales 10,000,000

Cost of sales                                   (6,000,000)

Gross profit 4,000,000

Expenses                                        (3,000,000)

Net profit 1,000,000

It had been budgeted to produce 200,000 units and these should have taken 10 hours each. In fact,

120,000 units were produced in 580,000 hours.

The capital employed by the division is $4,000,000 and the interest rate is 7%.

Calculate:

(a) Efficiency, capacity utilisation and production volume ratios or percentages

(b) ROCE (Return on Capital Employed)

(c) RI (Residual Income)

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ekkarill92 answered 1 year ago
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