Question

Concord Corporation has gathered the following information concerning one model of shoe: Variable manufacturing costs $30000 Variable selling and administrative costs $14000 Fixed manufacturing costs $160000 Fixed selling and administrative costs $120000 Investment $1700000 ROI 50% Planned production and sales 5000 pairs What is the desired ROI per pair of shoes? A .$169 B. $65 C. $170 D. $167

Answer 1

Answer:

Option (c) is correct.

Explanation:

Variable manufacturing costs = $30000

Variable selling and administrative costs = $14000

Fixed manufacturing costs = $160000

Fixed selling and administrative costs = $120000

Investment = $1700000

ROI = 50%

Planned production and sales = 5000 pairs

ROI = Investment Value × ROI Rate

       = $1,700,000 × 50%

       = $850,000

Desired ROI per Pair of Shoes :-

= ROI ÷ Planned production and sales

= $850,000 ÷ 5000  pairs

= $170