What is the maximum amount the company pay

Assignment Help Accounting Basics
Reference no: EM132187497

Question - National Restaurant Supply, Inc. sells restaurant equipment and supplies throughout most of the United States. Management is considering adding a machine that makes sorbet to its line of ice cream making machines. Management will negotiate the price of the sorbet machine with its Swedish manufacturer.

Management of National Restaurant Supply believes the sorbet machine can be sold to its customers in the United States for $4,950. At that price, annual sales of the sorbet machine should be 100 units. If the sorbet machine is added to National Restaurant Supply's product lines, the company will have to invest $600,000 in inventories and special warehouse fixtures. The variable cost of selling the sorbet machines would be $650 per machine.

If National Restaurant Supply requires a 15% return on investment (ROI), what is the maximum amount the company would be willing to pay the Swedish manufacturer for the sorbet machines?

Reference no: EM132187497

Questions Cloud

What is the difference between an open system : What is the difference between an open system and a closed system in an organization?
Compute the manufacturing overhead rate for the year : Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Compute the manufacturing overhead rate for the year
Evaluate the overall production : Why do the management team members need to meet to evaluate the overall production after the event ends?
Demand drive the transportation industry : Please discuss how supply and demand drive the transportation industry? In your opinion, how does the transportation industry affect the environment?
What is the maximum amount the company pay : If National Restaurant Supply requires a 15% return on investment (ROI), what is the maximum amount the company would be willing to pay
Strength-weakness-opportunity or threat : Referring to the list below, identify for each factor if it is a Strength, Weakness, Opportunity or Threat. (SWOT Analysis)
What type of assumptions are you making : What actions do you believe they will take regarding this problem? What type of assumption(s) are you making about them in predicting their behavior
Compensation communicates : In managing the pay system, it is argued that "Compensation communicates. It signals what is important and what is not."
What is the balance of stockholders equity : Roberto Corporation was organized on January 1, 2018. What is the balance of stockholders' equity at the end of 2018

Reviews

Write a Review

Accounting Basics Questions & Answers

  Sam and dave own a small manufacturing company that makes

sam and dave own a small manufacturing company that makes all types of hunting gear from decoys to garments. sam is

  Calculate the amount of interest capitalized for 2011

On January 2, 2011, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2012.

  Describes the tablet stores purchases and payments process

Draw a UML class diagram that describes the Tablet Store's purchases and payments process and determine the Tablet Store's accounts payable

  Analysis of cash flow for a small business

Charles, a financial consultant, has been self-employed for two years. His list of clients has grown, and he is earning a reputation as a shrewd investor.

  Calculate the gross margin per unit of the standard

calculate the gross margin per unit of the standard product under the current cost system.for this question only assume

  How should this error be treated on the bank reconciliation

he company's accountant recorded a bank deposit as $460, How should this error be treated on the bank reconciliation

  What are the advantages and disadvantages of this method

What are the advantages and disadvantages of this method?

  What is the advantage to benchmarking in terms

What is the advantage to benchmarking in terms of improving companies' performance

  Review problem-sales and production budget

Sales and production budget. The Coby Company expects sales in 2018 of 201,000 units of serving trays. Coby's beginning inventory for 2018 is 13,000 trays.

  Compute the cash payback period and annual rate of return

Compute (1) the cash payback period and (2) the annual rate of return on the proposed capital expenditure

  Discuss how the sophistication of the company computer

Discuss how the sophistication of the company computer system impacts the accounting output and, alternatively, how the requirements for accounting outputs impact the design of the accounting information system.

  Prepare the journal entry to record payne income taxes

Prepare the journal entry(s) to record Payne's income taxes for 2013, assuming it is more likely than not that the deferred tax asset will be realized

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