P13-26 (similar to) The new CEO of Rigoli Manufacturing has asked for a variety

ID: 2398379 • Letter: P

Question

P13-26 (similar to) The new CEO of Rigoli Manufacturing has asked for a variety of information about the operations of the firm from last year. The CEO is given the following information, but with some c EEB Click the icon to view the variety of operations information.) Read the requirements. Requirement 1. Find (a) total sales revenue, (b) selling price, (c) rate of ret Begin by calculating the (a) total sales revenue. Rearrange the income stat EEl Cick the icon to view the variety of operations informaton.) roduct. Total sales revenues Number of units produced and sold Selling price Operating income Total investment in assets Variable cost per unit Fixed costs for the year 2 500,000 units 2 205,000 S 2,500,000 s 3.50 S 2,350,000 Sales revenue Print Done

Explanation / Answer

Answer:

(a)

Total Sales Revenue

=vaibale cost+ Fixed cost+ Operating income

=(3.50*500,000)+2,350,000+205000

=1,750,000+2,350,000+205000

= 4,305,000

____________________________

(b)

Selling Price calculation

=Total Sales Revenue/ number of units sold

= 4,305,000 /500,000

=$8.61 selling price per unit

_____________________________

(C)

Return on investment

=(operating Income/ Total Investment )*100

=(205,000/2,500,000)*100

=8.20%

_________________________________

(D)

Mark-up percentage on Full cost

=Operating income/ total cost

=205,000/(Variable cost+Fixed cost)

=205,000/(1,750,000+2,350,000)

=205,000/4,250,000

=4.82%

Rearrange income statement

Operating income

205000

Add: Fixed cost

2,350,000

Contribution margin

2,555,000

Add: Variable cost

(3.5*500,000)

1750000

Sales revenue

4,305,000