Scribd Logo
Upload

Welcome to Scribd!

  • 79 views

    Answer Key

    Uploaded by

    SHAZ NAY GULAY
    This document contains multiple choice questions and answers related to business and finance concepts like return on sales, operating profit, return on investment, economic value added, contribution margin, and residual income. The questions require calculations to determine the correct answer by applying formulas and concepts like unit variable cost, incremental fixed cost, contribution margin, operating assets, and weighted average cost of capital.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Answer Key

    Uploaded by

    SHAZ NAY GULAY
    79 views2 pages
    This document contains multiple choice questions and answers related to business and finance concepts like return on sales, operating profit, return on investment, economic value added, contribution margin, and residual income. The questions require calculations to determine the correct answer by applying formulas and concepts like unit variable cost, incremental fixed cost, contribution margin, operating assets, and weighted average cost of capital.

    Original Title

    answer key

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document contains multiple choice questions and answers related to business and finance concepts like return on sales, operating profit, return on investment, economic value added, contribution margin, and residual income. The questions require calculations to determine the correct answer by applying formulas and concepts like unit variable cost, incremental fixed cost, contribution margin, operating assets, and weighted average cost of capital.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    79 views2 pages

    Answer Key

    Uploaded by

    SHAZ NAY GULAY
    This document contains multiple choice questions and answers related to business and finance concepts like return on sales, operating profit, return on investment, economic value added, contribution margin, and residual income. The questions require calculations to determine the correct answer by applying formulas and concepts like unit variable cost, incremental fixed cost, contribution margin, operating assets, and weighted average cost of capital.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    .

    Answer: A
    Return on Sales: 18% ÷ 3 = 6%

    . Answer: A
    Operating profit: (0.14 x P700,000) P98,000
    Units sold = (Fixed costs + Profit) ÷ UCM (P462,000 + P98,000) ÷ P2 280,000

    . Answer: C
    New ROI: (200,000 + 40,000) ÷ (1M + 0.25M) 19.2%

    . Answer: B
    Operating income: 10M – 3M – 5M = P2 Million
    ROI = P2M ÷ P8M = 25%

    . Answer: C
    Let S = Sales
    0.3(19,510,000 + 0.3S) = (.4S – 12,000,000)
    S = 57,590,322.58

    . Answer: C
    Increase in annual income P2,800
    Additional required returns (P20,000 x 0.12) 2,400
    Increase in residual value P 400

    . Answer: C
    Unit variable cost P4.00
    Incremental unit fixed cost (P10,000/10) 1.00
    Minimum return per P1 of additional asset requirement 40,000 x 0.15 /10,000 0.60
    Minimum selling price P5.60

    . Answer: A
    Contribution provided by 10,000 units
    10,000 x (7.00 – 5.60) 14,000
    Divided by regular contribution margin per unit ÷ 6
    Maximum decrease in regular sales 2,333

    . Answer: B
    EVA = Investment center's after-tax operating income - (Investment center's total assets - Investment center's
    current liabilities) x Weighted-average cost of capital].
    Net operating profit P50,000
    Cost of investment (P800,000 – P80,000) x 0.075 46,800
    Economic Value Added P 3,200

    . Answer: B
    Controllable segment profit margin = Revenue - (Segment's variable operating costs + Controllable fixed
    costs).
    (P400,000 – P180,000 – P40,000) P180,000

    . Answer: B
    (1.3 x 0.8) – 100% = 4.0%

    . Answer: B
    Decrease in ROI: (0.90 x 0.70) – 1.00 = 37.0%

    . Answer: C
    ROI = Operating Profit ÷ Average investment
    Average Operating assets: (P1,000,000 ÷ 2) = P500,000
    ROI: (P100,000 ÷ P500,000) = 20%

    . Answer: A
    Return on sales = Profit ÷ Net sales
    P100,000 ÷ P1,000,000 = 10%

    . Answer: B
    Total assets = Sales ÷ Asset turnover
    P1,000,000 ÷ 2 = P500,000

    . Answer: D
    No, because the manager's bonus would go down because the company's ROI is 20 percent only.

    . Answer: A
    Operating profit P100,000
    Less Required return on average assets: (P500,000 x 15%) 75,000
    Residual income P 25,000

    You might also like