What is the accounting rate of return for the machine

Assignment Help Managerial Accounting
Reference no: EM132593796

Question 1: A company is planning to purchase a machine that will cost $29,400 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine?

Sales $97,000

Costs:

Manufacturing$50,400

Depreciation on machine 4,900

Selling and administrative expenses 37,000 (92,300)

Income before taxes $4,700

Income tax (35%) (1,645)

Net income $3,055

Multiple Choice

Option 1: 33.33%.

Option 2: 10.39%.

Option 3: 50.00%.

Option 4: 4.90%.

Option 5: 20.78%.

Reference no: EM132593796

Questions Cloud

What role does medicare and medicaid play : What role does Medicare and Medicaid play in meeting the health care needs of the American public? Which por- tion of Medicare is universal?
Which theorist would you select to construct a framework : Which theorist would you select to construct a framework for care of your staff and patients? Please explain why with examples. Examples include fear.
Find what is estimated change in the company net operating : Evaluate What is the estimated change in the company's net operating income if it can increase total sales by $1,900? (Do not round intermediate calculations.)
Calculate the accounting rate of return is : The annual average investment amount used to calculate the accounting rate of return is. Depreciation method Straight-line,Annual net cash flows $46,200
What is the accounting rate of return for the machine : A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine?
Three metabolic stages of cellular respiration : What are the three metabolic stages of Cellular respiration? How many ATP molecules are produced by Cellular Respiration and by Fermentation?
Find what is the payback period for the machine : What is the payback period for this machine? The company expects to sell the machine's output of 3,000 units evenly throughout each year.
How use roi and ri techniques to advise mega glass : How Use ROI and RI techniques to advise Mega Glass. The Clarity Division of Mega Glass Company has an investment of $1,500,000
Calculate the standard deduction stephanie will claim : Calculate the 2019 standard deduction Stephanie will claim under the independent circumstances (assume that Stephanie's parents will claim)

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Estimate what would be the net operating income

Estimate what would be the net operating income, If the selling price increases by $2 per unit and the sales volume decreases by 100 units?

  What amount would beryl pre-tax income increase

Beryl Enterprise is considering closing down, If this location were to discontinue operations, by what amount would Beryl's pre-tax income increase?

  How much can nelson short-term debt or notes payable

Find How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.8? Do not round intermediate calculations

  Calculate the operating income to be earned

Calculate the operating income to be earned under each alternative. Which course or action will produce the higher operating income.

  Find what is the acceptable range for the transfer price

Collyer Product, idle capacity to handle all of the Pump Division needs. What is the acceptable range, if any, for the transfer price between the two divisions?

  Compute the payback reciprocal

Compute the payback reciprocal. Sophie is planning to buy an equipment costing P640,000 that has an estimated life of 30 years and is expected

  Does the company need to switch to credit sales

Does the company need to switch to credit sales if the cost of funds is 30%? Does the company sell at a discount or without a discount?

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Perform the overhead analysis using activity-based costing

ACCT204 Management Accounting - Perform again the overhead analysis using Activity-based costing (ABC) system. The overhead analysis under ABC system involves

  Calculate the contribution margin ratio

Calculate the break-even in units - calculate the contribution margin ratio and calculate the break-even in sales dollars.

  What amount would be transferred to finished goods

If all the goods were completed how do find out what amount would be transferred to finished goods? Smithtown Manufacturing expected to produce 100,000 units

  Variable-costing income statement for the same period

Illuminate Bright Light (IBL), a producer of energy-efficient light bulbs prepared the following absorption costing income statement for the year ended

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd