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Rzqust [24]
3 years ago
10

Calculating Residual Income Pelican Manufacturing earned operating income last year as shown in the following income statement:

Sales $531,250 Cost of goods sold 280,000 Gross margin $251,250 Selling and administrative expense 184,400 Operating income $66,850 Less: Income taxes (@ 40%) 26,740 Net income $40,110 At the beginning of the year, the value of operating assets was $390,000. At the end of the year, the value of operating assets was $460,000. Pelican requires a minimum rate of return of 10%. Required: For Pelican, calculate: 1. Average operating assets $ 2. Residual income $
Business
1 answer:
TiliK225 [7]3 years ago
6 0

Answer:

(A) $425,000

(B) $24,350

Explanation:

(a) Average Operating Assets:

= (Beginning Operating Assets + Ending Operating Assets) ÷ 2

= ($390,000 + $460,000) ÷ 2

= $425,000

Therefore, the average operating assets is $425,000.

(b) Residual Income:

= Operating Income - (Minimum Rate of Return × Average Operating Assets)

= $66,850 - (10% × $425,000)

= $66,850 - $42,500

= $24,350

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Answer:

B) the same amount of capital and labor

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Only an increase in productivity shifts the production function upward given that all factors of production remain the same. Generally technology improves productivity and causes those shifts.  

Productivity measures the rate of output per unit of input. E.g. I write 10 pages per hour. If my writing productivity increases, I will write 12 pages per hour. Labor productivity is measured by the amount of output produced per hour worked.

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3 years ago
Triano Brothers, an insurance firm, follows an administrative procedure for measuring the relative worth of its jobs. The organi
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Answer: Option (B)

Explanation:

Here, in this case we can state that <em>job evaluation </em>is being exemplified. The Triano Brothers are using job evaluation, so as to have a systematic approach in order to determine value of a job in regards to the several jobs in their organization. The organization attempts to have a orderly comparison in between different jobs as to assess the relative value.

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3 years ago
In your own opinion, why do you think it is important to establish a daily job search routine?
Alenkinab [10]

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5 0
3 years ago
Read 2 more answers
if average demand for invenrory item is 200 units per day lead time is three days and safety stock is 1-- units the reorder poin
Ronch [10]

please do you mean 1 unit for safety stock or 100 units, will solve for both

Answer:when safety stock =1, Reorder point= 601 units

when safety stock =100,  Reorder point= 700 units

Explanation:

Reorder Point (ROP), also called  reorder level, is the point  of inventoryset by a busness  in which it replenishes its stock of items.

given:

Average demand= 200

lead time = 3

when safety stock =1

Reorder point= (Average demand X Delivery lead time ) + Safety stock

                = (200 x 3 ) +1 = 601 units

when safety stock = 100

   Reorder point= (Average demand X Delivery lead time ) + Safety stock

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6 0
2 years ago
Suppose there are only two producers of aircraft in the world, AirCraft in the United States and AirEurope in the European Union
Jlenok [28]

Answer:

1. AirEurope should produce if it wants to maximize its profit.

2.  False

Explanation:

New payoffs after subsidy:

Aircraft/ AirEurope               Produce     Not Produce

Produce                                 -3 , <u>6</u>              75 , 0

Not Produce                          0 , 74              0 , 0

With a $9 million subsidy, regardless of whether Aircraft produces or not, AirEurope should<u> produce</u> if it wants to maximize its profit.

The statement is false (Aircraft would earn a negative payoff if it enters).

8 0
2 years ago
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