Reference no: EM131884758
Problem
Johnny Mobile started a food truck business in 2017 by investing $100,000 of his own money in the corporation in exchange for stock. Mr. Mobile concentrates on serving Lobster Rolls and his profits have more than doubled from 2017 - 2019. Mr. Mobile does not understand why his profits have increased faster than his volume, but he believes that his focus and strategic positioning regarding high levels of customer service and product quality have helped fuel this growth in his business.
Projected sales for 2020 are $396,000 with a cost of goods sold (food costs only - Mr. Mobile only uses fresh ingredients) equal to $178,200 with the average lobster roll selling for $11.00.
Currently, Mr. Mobile owns two food trucks. One salaried person staffs each food truck full-time (annual cost per full-time food truck employee is $30,000) and six college students always work 30 hours per week helping out where needed (annual cost per helper employee is $15,000). An outside accountant prepares the taxes and bookkeeping at a cost of $900 per month. The necessary food trucks were originally purchased for cash in 2017. The annual depreciation expense for each food truck is $7,500. Propane and gas have typically run $7,165 annually. Mr. Mobile has noticed that annual expenses for accounting, depreciation, and propane/gas have been rather constant regardless of the sales level.
Mr. Mobile would like an after-tax net income of $65,000 at a tax rate of 30%. What volume must be reached in number of lobster rolls in order to obtain the desired income?
Calculate the return on assets
: Calculate the Return on Assets (ROA) given that Net Income = $1079 and Total Assets = $1330.
|
Under what circumstances can john claim an active loss
: If he participates 85 hours in the business and it increase a loss of $34,000, under what circumstances can John claim an active loss?
|
How can the activity rates for the various activities be use
: How can the activity rates (i.e. cost per activity) for the various activities be used to target process improvements for Johnson Associates?
|
How should you redesign your strategy
: If you decide to seek the higher interest rate in available in USD but not covering the forward dollar receipts, how should you redesign your strategy ?
|
What volume must be reached in number of lobster rolls
: Mr. Mobile would like an after-tax net income of $65,000 at a tax rate of 30%. What volume reached in number of lobster rolls in order to obtain desired income?
|
What is the economic order quantity
: If a company has annual sales of 3,000,000, a cost of placing an order of $55, and a 45% carrying cost, what is the Economic Order Quantity?
|
Compute the beta equity for company new
: Compute the beta equity for company NEW after its listing in the stock exchange.
|
How much should you be willing to pay today for promise
: What is the present value of $1,000 received three years from today if interest rates are currently 6 percent?
|
Compute a materials price variance for the plates purchased
: Compute a materials price variance for the plates purchased last month and a materials quantity variance for the plates used last month.
|