7 Below is the financial informasion toe T obin Company to the tend yew s Sales

Question

7 Below is the financial informasion toe T obin Company to the tend yew s Sales ROI 150,000 '3% Capital (Asset) Turnover The company's net operating income for the year munt have been A. $3,900 B. $97,500 C. $19,500 D. $30,000 E. None of the above 8 Becker Inc. is facing a problem with their 4th quarter absorption costing net operating income on Decembes 2s Their net operating income target is S1,000,000 and the data so far is as follows S10,000,000 (5200 uit) Sales Revenue Variable COGS Fixed manufacturing overhead Fixed S&A; Variable S&A; 54,000,000 (580 unin 55,000,000 $300,000 Commission on Sales 4% Becker has had the year and all the units produced so far have been sold. The CEO is planning to prodace items for the last week of December to meet the net operating income target How many units (nearest whole number) need to be produced for inventory to meet the net operating income target if the sales commission is left unchanged at 4%? A. B. C. D. E. None of the above a policy of having zero inventories at the end of each quarter. No further sales are possible during inventory in 3,333 units 50,000 units 4,545 units 8,140 units

Explanation / Answer

7). The Answer is "A".

Capital Turnover = Net Sales / Capital

5 = $150000 / Capital

Capital = $150000 / 5

Capital = $30000

Net Operating Income = Capital * ROI

= $30000 * 13%

= $3900

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