Homework Help is Here – Start Your Trial Now!
Business
Accounting
apanese kadget: The Tokyo Division of Toy King manufactures "Togo Toy" and sells them in the market for P6,000 each. The following data are from the Tokyo Division's 2018 Variable cost Fixed overhead Total assets P3,800 per unit P6,080,000 P12,500,000 Toy King has instructed the Tokyo Division to budget a rate of return on total assets hefore taxes) of 20%. 1. Suppose the Tokyo Division expects to sell 3,400 units during 2018: a. What rate of return will be earned on total assets? b. What would be the expected capital turnover? What would be the operating income percentage of sales? C. 2 The Tokyo Division is considering adiuctmon

apanese kadget: The Tokyo Division of Toy King manufactures "Togo Toy" and sells them in the market for P6,000 each. The following data are from the Tokyo Division's 2018 Variable cost Fixed overhead Total assets P3,800 per unit P6,080,000 P12,500,000 Toy King has instructed the Tokyo Division to budget a rate of return on total assets hefore taxes) of 20%. 1. Suppose the Tokyo Division expects to sell 3,400 units during 2018: a. What rate of return will be earned on total assets? b. What would be the expected capital turnover? What would be the operating income percentage of sales? C. 2 The Tokyo Division is considering adiuctmon

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 6EB: Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit...
See similar textbooks
icon
Related questions
Question

The Problem and Questions are all on the picture

I would like the No. 1 to 3 questions to be solved as well as the subparts included. Thank you.

Tokyo manager knows that if his production falls to 2,400 units he could eliminate s assets, reducing total assets to P10 million and annual fixed overhead to P4.9 million. Should the Tokyo manager sell for P5,000 per unit? Support your answer with some Should the Tokyo manager sell for P5,000 per unit? Support your answer the relevant computations. Ignore the effects of income taxes and import duties
Transcribed Image Text:Tokyo manager knows that if his production falls to 2,400 units he could eliminate s assets, reducing total assets to P10 million and annual fixed overhead to P4.9 million. Should the Tokyo manager sell for P5,000 per unit? Support your answer with some Should the Tokyo manager sell for P5,000 per unit? Support your answer the relevant computations. Ignore the effects of income taxes and import duties
9.24 market for P6,000 each. The following data are from the Tokyo Division's 2018 The Tokyo Division of Toy King manufactures "Togo Toy" and sells them in the market for P6,000 each. The following data are from the Tokyo Division's 2018 Japanese n hudget: Variable cost Fixed overhead Total assets P3,800 per unit P6,080,000 P12,500,000 Toy King has instructed the Tokyo Division to budget a rate of return on total assets before taxes) of 20%. 1 Suppose the Tokyo Division expects to sell 3,400 units during 2018: What rate of return will be earned on total assets? b. What would be the expected capital turnover? What would be the operating income percentage of sales? 2. The Tokyo Division is considering adjustments in the budget to reach the desired 20% C. rate of return on total assets: a. How many units must be sold to obtain the desired return if no other part of the budget is changed? b. Suppose sales cannot be increased beyond 3,400 units. How much must total assets be reduced to obtain the desired return? Assume that for every P1,000 decrease in total assets, fixed costs decrease by P100. 3. Assume that only 2,400 units can be sold in the Japanese market. However, another 1,400 units can be sold to the American Marketing Division of Toy King. The Tokyo manager has offered to sell the 1,400 units for P5,500 each. The American Marketing Division manager has countered with an offer to pay P5,000 per unit, claiming that she can subcontract production to an American producer at a cost equivalent to P5,000. The
Transcribed Image Text:9.24 market for P6,000 each. The following data are from the Tokyo Division's 2018 The Tokyo Division of Toy King manufactures "Togo Toy" and sells them in the market for P6,000 each. The following data are from the Tokyo Division's 2018 Japanese n hudget: Variable cost Fixed overhead Total assets P3,800 per unit P6,080,000 P12,500,000 Toy King has instructed the Tokyo Division to budget a rate of return on total assets before taxes) of 20%. 1 Suppose the Tokyo Division expects to sell 3,400 units during 2018: What rate of return will be earned on total assets? b. What would be the expected capital turnover? What would be the operating income percentage of sales? 2. The Tokyo Division is considering adjustments in the budget to reach the desired 20% C. rate of return on total assets: a. How many units must be sold to obtain the desired return if no other part of the budget is changed? b. Suppose sales cannot be increased beyond 3,400 units. How much must total assets be reduced to obtain the desired return? Assume that for every P1,000 decrease in total assets, fixed costs decrease by P100. 3. Assume that only 2,400 units can be sold in the Japanese market. However, another 1,400 units can be sold to the American Marketing Division of Toy King. The Tokyo manager has offered to sell the 1,400 units for P5,500 each. The American Marketing Division manager has countered with an offer to pay P5,000 per unit, claiming that she can subcontract production to an American producer at a cost equivalent to P5,000. The
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Monitoring By the Board of Directors and Others
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Essentials of Business Analytics (MindTap Course …
Essentials of Business Analytics (MindTap Course …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS