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Beaker Company
Statement of Financial Position
   
 BeginningEnding 
 BalanceBalance
Assets  
Cash$50,000$70,000
Accounts receivable20,00025,000
Inventory30,00035,000
Plant and Equipment (net)120,000110,000
Investment in Cedar Company80,000100,000
Land (undeveloped)170,000170,000
Total Assets$470,000510,000
   
Liabilities and Owners' Equity  
Accounts payable$70,000$90,000
Long-term debt250,000250,000
Owner's equity150,000170,000
Total liabilities and owner's equity$470,000$510,000

 

Beaker Company
 Income Statement
   
Sales $414,000
Less Operating Expenses 351,900
Net Operating Income 62,100
Less Interest and Taxes  
    Interest Expense$30,000 
    Tax Expense10,00040,000
Net Income $22,000

The company paid dividends of $2,100 last year. The "Investment in Cedar Company" on the statement of financial position represents an investment in the stock of another company.

Required:

i. Compute the company's margin, turnover, and return on investment for last year.

ii. The board of directors of Beaker Company has set a minimum required return of 20%. What was the company's residual income last year?

      

 

Question 2.
Sales$30,000,000
Net Operating income$1,170,000
Average operating assets$8,000,000
The company's minimum required rate of return18%
      

 

Question 3.
Sales$480,000
Variable Expenses$202,000
Fixed Manufacturing Expenses$158,000
Fixed Selling and Administrative Expenses$130,000
      

 

Question 4.
 Per Unit
Direct Materials$2.80
Direct Labor$6.30
Variable Overhead$8.50
Supervisor's Salary$2.60
Depreciation of Special Equipment$6.80
Allocated General Overhead$6.10
      

 

Question 5.
Direct Materials$18.50
Direct Labor$1.20
Variable manufacturing overhead$8.40
Fixed  manufacturing overhead$3.90
Unit product cost$32.00
    • Posted: 5 years ago
    • Due: 
    • Budget: $25
    Answers 2

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    • Financial data for Beaker Company for last year appear below.

      Beaker Company

      Statement of Financial Position

      Beginning

      Ending

      Balance

      Balance

      Assets

      Cash

      $50,000