Company ACompany BCompany CSales$450,000 $670,000 $630,000 Net operating income $43,000 Average operating assets$168,000 $155,000 Return on investment (ROI)19%19% %Minimum required rate of return: Percentage14% %14%Dollar amount $41,000 Residual income $6,000A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round your intermediate calculations.)

ROI means return on investment. It is the amount of return earned by the entity on invested…

Answered: Company A Company B Company C Sales…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 14EB: Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are...

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Similar questions

Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are $600,000. Company B is a service firm with current service revenue of $2,800,000 and a 15% contribution margin. Company Bs fixed costs are $375,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 15% increase in sales? Explain why.
Break-even analysis for a service company3 Sprint Corporation (S) is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 60 million direct subscribers (accounts) that generated revenue of 33,347 million. Costs and expenses for the year were as follows (in millions): Assume that 30% of the cost of revenue and 70% of the selling, general, and administrative expenses are fixed to the number of direct subscribers (accounts). a. What is Sprints break-even number of accounts, using the data and assumptions given? Round to one decimal place. b. How much revenue per account would be sufficient for Sprint to break even if the number of accounts remained constant? Round to one decimal place.
ABC Company is a service center with the following operating data: Sales P 450,000 Operating Income 25,000 Net Income after tax 8,000 Average assets invested 500,000 Shareholders’ equity 200,000 Minimum required ROI 6% Based on the above information, which one of the following statements is correct? ABC Company has a 1. Return on investment of 4% 2. Residual income of (P5,000) 3. Return on investment of 1.6% 4. Residual income of (P22,000). Group of answer choices 1 2 3 4
Wildhorse Corp. reported the following: Beginning of year operating assets $3,220,000 End of year operating assets 3,020,000 Contribution margin 1,020,000 Sales 5,020,000 Controllable fixed costs 626,880 Its required return is 11%.Compute the company’s ROI.
Supply the missing data in the following table : Division A Division B Division C Sales P 60,000 P 75,000 P 100,000 Operating Income _______ 25,000 _______ Operating Assets 30,000 _______ P 50,000 Return on investment 15 % 10 % 20 % Minimum required rate of return 10 % _______ _______ Residual income ________ P 5,000 0 Show the solutions pls, thank you.
Tennill Inc. has a $1,400,000 investment opportunity with the following characteristics: Sales $ 4,480,000 40 % of sales Contribution margin ratio Fixed expenses S 1,657,600 The ROI for this year's investment opportunity is closest to: A) 8.1% B) 128.0 % C) 3.0% D) 9.6% 33)
A company has three product lines, one of which reflects the following results: Sales $215,000 Variable expenses 125,000 Contribution margin 90,000 Fixed expenses 130,000 Net loss $ (40,000) If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company’s net income will Group of answer choices decrease by $12,000. increase by $40,000. decrease by $90,000. increase by $12,000.
A family friend has asked your help in analyzing the operations of three anonymous companies operatingin the same service sector industry. Supply the missing data in the table below:CompanyA B CSales .............................................................. $9,000,000 $7,000,000 $4,500,000Net operating income ................................... $ ? $ 280,000 $ ?Average operating assets ............................. $3,000,000 $ ? $1,800,000Return on investment (ROI) .......................... 18% 14% ?Minimum required rate of return:Percentage ................................................ 16% ? 15%Dollar amount ............................................ $ ? $ 320,000 $ ?Residual income ............................................ $ ? $ ? $ 90,000
The Electronics Division of Anton Company reports the following results for the current year: Revenues $ 445,000 Operating expenses $ 400,000 Operating income $ 45,000 Operating assets $ 550,000 Anton Company has set a target return on investment (ROI) of 12% for the Electronics Division. The Electronic Division's return on investment is: Multiple Choice 11.25%. 8.18%. 10.11%. 12.00%.
Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $326,000 $978,000 Variable costs 130,800 586,800 Contribution margin $195,200 $391,200 Fixed costs 134,200 228,200 Income from operations $61,000 $163,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. fill in the blank 1 Bryant Inc. fill in the blank 2 b. How much would income from operations increase for each company if the sales of each increased by 15%? If required, round answers to nearest whole number. Dollars Percentage Beck Inc. $fill in the blank 3 fill in the blank 4 % Bryant Inc. $fill in the blank 5 fill in the blank 6 % c. The difference in the   of income from operations is due to the difference in the operating leverages. Beck Inc.'s   operating leverage means that its fixed costs are a   percentage of contribution margin than are Bryant Inc.'s.
Spartans Inc. has three operating divisions: Alpha, Beta, and Gamma. Financial information for each division in displayed below.                                Alpha                 Beta                    Gamma Sales                   $525,000             $625,000               $475,000 Oper. Exp.          $465,000                   ?                     $437,000 Oper. Income       $60,000               $75,000                       ?       Inv. Assets                  ?                          ?                       $380,000 ROI                         0.2000                 0.1500                         ?       Sales Margin               ?                              ?                         0.0800 Cap. Turn                   ?                        1.25                      ?       Use the DuPont Equation to calculate the following values: Return on Investment =    Net Operating Income                       Avg. Invested Assets…
Spartans Inc. has three operating divisions: Alpha, Beta, and Gamma. Financial information for each division in displayed below.                                Alpha                 Beta                    Gamma Sales                   $525,000             $625,000               $475,000 Oper. Exp.          $465,000                   ?                     $437,000 Oper. Income       $60,000               $75,000                       ?       Inv. Assets                  ?                          ?                       $380,000 ROI                         0.2000                 0.1500                         ?       Sales Margin               ?                              ?                         0.0800 Cap. Turn                   ?                        1.25                      ?       Use the DuPont Equation to calculate the following values: Return on Investment =    Net Operating Income                       Avg. Invested Assets…

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