The Norse Division of Gridiron Concepts Inc. experienced significant revenue and profit growth from 20Y4 to 20Y6 as shown in the following divisional income statements:
| 20Y4 | 20Y5 | 20Y6 | |
| Sales | $ 1,470,000 | $ 2,100,000 | $ 2,450,000 |
| Cost of goods sold | 1,064,000 | 1,498,000 | 1,680,000 |
| Gross profit | 406,000 | 602,000 | 770,000 |
| Operating expenses | 185,500 | 224,000 | 231,000 |
|
Income from operations |
$ 220,500 | $ 378,000 | $ 539,000 |
| Invested assets | $735,000 | $1,500,000 | $3,500,000 |
There are no service department charges, and the division operates as an investment center that must maintain a 15% return on invested assets.
Instructions: Determine the profit margin, investment turnover, and return on investment for the Norse Division for 20Y4-20Y6. Based on your calculations, write a paragraph or two to the president of Gridiron Concepts Inc., Knute Holz, evaluating the division's performance.
In: Accounting
Clearly define Cost Centres , revenue center ,
investment centers and others.
i read on book but i can't able to imagine a suitable example so
the concept sen on my mind . so, please illustrate all the
responsibility centres with very nice examples like it sets in my
ming upon single reading. And I hope you would do so in brief .
In: Accounting
FASB and IASB recently delayed the effective date of their revenue standard.
1. What new information is available regarding FASB's and/or IASB's progress toward addressing the underlying reason that prompted the delay?
2.How prevalent is sustainability reporting in (a) the U.S. and (b) globally? In citing specific statistics, indicate the size of the company to which the information pertains.
3. What standards or guidelines should accounting professionals involved in sustainability reporting be familiar with?
In: Accounting
domimant retailer is considering a project whose data
are shown below. revenue and cash operating expenses are expected
to be constant over the roject's 5 year expected operating life
annual sales revenue is 90000 and cash operating expense are 37000
per year. the new equipment cost and depeciable basis is 125,000
and it will depreciated by MACRS as 5 years property. the new
equipment replaces older equipment that is fully depreciated but
can be sold for 8000. in addition, the new equipment requires an
additional 5000 of net operating working capital, which can be
fully recovered at the end of the project. the new equipment is
expected to be sold for 10995 at the end of year 5. the marginal
tex rate is 28%
-what is year 3 net operating cash flow?
-what is the terminal year non-operating cash flow at the end of
year 5?
-what is the NPV of the project if Dominant WACC is 12%
In: Finance
why analysts might remove foreign exchange gains or losses when analyzing revenue and expenses for the year.
In: Accounting
Presented below is financial data for the XPO Corporation.
|
Amounts in thousands |
|
|
Sales revenue |
$11,750 |
|
Cost of goods sold |
7,925 |
|
Net income |
2,250 |
|
Inventory |
825 |
|
Current assets |
5,875 |
|
Current liabilities |
3,375 |
1. Calculate the following ratios.
2. Assuming the following industry averages, comment on XPO Corp's performance in relation to the industry averages. Make sure to indicate what account(s) could be attributed to XPO's better or worse performance as compared to the industry average and indicate whether the accounts you've identified would be higher or lower than the industry's accounts to account for its better or worse performance.
In: Accounting
In: Economics
Unoccupied seats on flights cause airlines to lose revenue. Suppose a large airline wants to determine of the mean number of unoccupied seats on all its flights is greater than 10. To accomplish this, the records of 60 flights are randomly selected and the number of unoccupied seats is noted for each of the sampled flights. The sample mean is 11.4 seats and the sample standard deviation is 3.4 seats. Test the claim that mean number of unoccupied seats on all its flights is greater than 10 at the 5% significance level.
In: Statistics and Probability
Review Question
1. What is sales revenue forecasting?
2. What types of data are needed to forecast sales or revenues?
3. What is cost estimation?
4. What is the first step managers need to complete when estimating costs?
20. How does technology affect costs?
22. Identify three environmental factors that affect business decisions related to costs.
25. How does technological innovation generally affect a firm' s costs?
27. What is meant by the learning curve?
28. What are controllable costs?
Exercise and Problems
6. Mega Profits Company estimated its annual total cost function to be: Y = $150,000 + $.57 x Assuming that Y represents total cost and x equals the number of units sold, use this equation to answer the following questions:
a. What is the firm' s total fixed cost?
b. What is the firm' s variable cost per unit?
c. Compute total costs if the firm sells 100,000 units.
d. Compute total costs if the firm sells 200,000 units.
e. If the firm' s product sells for $1.00, how many units does the firm need to sell to break even?
f. If the firm' s product sells for $1.50, how many units does the firm need to sell to break even?
7. Morrison Hotel uses its banquet room to host parties, dinner dances, and business meetings. The hotel serves meals and provides a variety of services for each event. A local consultant analyzed recent cost data and estimated the total cost function per event to be as follows: Y = $1,000 + $9.00 x Assuming that Y represents total cost and x equals the number of guests, use this equation to answer the following questions:
a. What is the firm' s total fixed cost per event?
b. What is the firm' s variable cost per guest?
c. Compute total costs if 50 guests attend the event.
d. Compute total costs if 100 guests attend an event.
e. If the hotel charges $25.00 per guest, how many guests must attend for the hotel to break even at each event?
f. If the hotel charges $28.00 per guest, how many guests must attend for the hotel to break even at each event?
g. If the hotel charges $28.00 per guest, would you advise this hotel to host events for 50 or fewer guests? Why or why not?
3. Durango Mountain Bike Company wants to open a bicycle repair shop in a suburb of a major metropolitan area. The industry association estimates that 20 percent of bicycles are repaired by similar service companies and that the average owner spends $100 per bicycle on maintenance each year. The census and local chamber of commerce data indicate that there are 10,000 bicycles in the county. Three other competitors exist within a twenty-five-mile radius of the proposed business location. Based on a consumer survey, the owners believe that they can capture 30 percent of the market in the first year of operation. Based on these data, address the following requirements:
a. What is the potential number of bicycles likely to be commercially repaired?
b. What is the total potential bicycle repair revenue available in the market?
c. How much revenue can Durango Mountain Bike expect to generate?
In: Accounting
Required information
Information for Pueblo Company follows:
| Product A | Product B | ||||
| Sales Revenue | $ | 48,000 | $ | 61,000 | |
| Less: Total Variable Cost | $ | 10,000 | $ | 18,340 | |
| Contribution Margin | $ | 38,000 | $ | 42,660 | |
The total fixed costs are $42,000.
Determine target sales needed to earn a $21,000 target profit.
In: Accounting