Project #20368 - w3_6

Do not change numbering system

Question 1W3

 

 

 
Using these data from the comparative balance sheet of Rosalez Company, perform horizontal analysis. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 0 decimal places, e.g. 12%.)

           
Increase or (Decrease)
   
Dec. 31, 2012
 
Dec. 31, 2011
 
Amount
 
Percentage
Accounts receivable   $ 501,200   $ 361,600  
$
 
 %
Inventory   $ 828,800   $ 561,900  
$
 
 %
Total assets   $3,127,600   $2,741,800  
$
 
 %
Question 2 W3
Using these data from the comparative balance sheet of Rosalez Company, perform vertical analysis. (Round percentages to 1 decimal place, e.g. 12.5%.)

   
Dec. 31, 2012
 
Dec. 31, 2011
   
Amount
 
Percentage
 
Amount
 
Percentage
Accounts receivable   $ 524,400  
 %   $ 352,800  
 %
Inventory   $ 755,700  
 %   $ 591,900  
 %
Total assets   $3,171,800  
 %   $2,742,700  
 %
Question 3W3
Vertical analysis (common-size) percentages for Vallejo Company’s sales, cost of goods sold, and expenses are listed here.

Vertical Analysis
 
2012
 
2011
 
2010
Sales  
100
%  
100
%  
100
%
Cost of goods sold  
62.7
   
64.1
   
65.9
 
Expenses  
24.2
   
27.2
   
29.0
 

Did Vallejo’s net income as a percent of sales increase, decrease, or remain unchanged over the 3-year period? Provide numerical support for your answer.

 
Question 4W3
Horizontal analysis (trend analysis) percentages for Spartan Company’s sales, cost of goods sold, and expenses are listed here.

Horizontal Analysis
 
2012
 
2011
 
2010
Sales   96.2 %   104.8 %   100.0 %
Cost of goods sold   101.0     98.0     100.0  
Expenses   105.6     95.4     100.0  

Explain whether Spartan’s net income increased, decreased, or remained unchanged over the 3-year period.

Question 5W3
These selected condensed data are taken from recent balance sheets of Bob Evans Farms (in thousands).

   
2009
 
2008
Cash  
$ 13,606
 
$ 7,669
Accounts receivable  
23,045
 
19,951
Inventories  
31,087
 
31,345
Other current assets  
12,522
 
11,909
Total current assets  
$ 80,260
 
$ 70,874
Total current liabilities  
$245,805
 
$326,203
 
(a)
Compute the current ratio for each year. (Round answers to 2 decimal places, e.g. .12 : 1.)

   
2009
 
2008
Current ratio:  
:1  
Question 6W3
Staples, Inc. is one of the largest suppliers of office products in the United States. It had net income of $738.7 million and sales of $24,275.5 million in 2009. Its total assets were $13,073.1 million at the beginning of the year and $13,717.3 million at the end of the year. What is Staples, Inc.’s asset turnover ratio and profit margin ratio? (Round answers to 2 decimal places, e.g. 1.25 or 2.05%.)

Asset turnover ratio  
 times
Profit margin ratio  
 %
 
Question 7W3
Selected data taken from a recent year’s financial statements of trading card company Topps Company, Inc. are as follows (in millions).

Net sales   $326.7
Current liabilities, beginning of year   41.1
Current liabilities, end of year   62.4
Net cash provided by operating activities   10.4
Total liabilities, beginning of year   65.2
Total liabilities, end of year   73.2
Capital expenditures   3.7
Cash dividends   6.2

Compute these ratios: current cash debt coverage ratio, cash debt coverage ratio, and free cash flow. Provide a brief interpretation of your results. (Round answers to 2 decimal places, e.g. 0.12.)

Current cash debt coverage ratio  
 times
Cash debt coverage ratio  
 times
Free Cash Flow  
$
 millions
Question 1W6

A major accounting contribution to the managerial decision-making process in evaluating possible courses of action is to


 

decide which actions that management should consider.

assign responsibility for the decision.

provide relevant revenue and cost data about each course of action.

determine the amount of money that should be spent on a project.

 
Question 2w6

In incremental analysis,


 

only costs are analyzed.

only revenues are analyzed.

both costs and revenues may be analyzed.

both costs and revenues that stay the same between alternate courses of action will be analyzed.

 

 
Question 4w6

It costs Ross Co. $24 of variable and $10 of fixed costs to produce one bathroom scale which normally sells for $70. A foreign wholesaler offers to purchase 2,000 scales at $30 each. Ross would incur special shipping costs of $2 per scale if the order were accepted. Ross has sufficient unused capacity to produce the 2,000 scales. If the special order is accepted, what will be the effect on net income?


 

$8,000 increase

$8,000 decrease

$12,000 decrease

$60,000 increase

 
Question 7w6

A company decided to replace an old machine with a new machine. Which of the following is considered a relevant cost?


 

The current disposal price of the old equipment

Depreciation expense on the old equipment

The book value of the old equipment

The loss on the disposal of the old equipment

 
 
 
 

 

Question 6w6

Mink Manufacturing is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $60 and Mink would sell it for $130. The cost to assemble the product is estimated at $42 per unit and the company believes the market would support a price of $170 on the assembled unit. What decision should Mink make?


 

Process further, the company will be better off by $28 per unit.

Sell before assembly, the company will be better off by $40 per unit.

Process further, the company will be better off by $58 per unit.

Sell before assembly, the company will be better off by $2 per unit.

 

 

 

Question 5w6 

Carter, Inc. can make 100 units of a necessary component part with the following costs:

Direct Materials $120,000
Direct Labor 20,000
Variable Overhead 60,000
Fixed Overhead 40,000



If Carter purchases the component externally, $30,000 of the fixed costs can be avoided. At what external price for the 100 units is the company indifferent between making or buying?

 

 

 

$200,000

$240,000

$170,000

$230,000

 

 

 

Question 3w6

 

Incremental analysis is most useful

 

as a replacement technique for variance analysis.

in choosing between the net present value method and the internal rate of return method.

in developing relevant information for management decisions.

 

 

    in evaluating the master budget.


 

Subject Business
Due By (Pacific Time) 12/25/2013 12:00 am
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