Robichau Inc. reported the following results from last year's operations: Sales$6,300,000Variable expenses 4,930,000Contribution margin 1,370,000Fixed expenses 803,000Net operating income$ 567,000Average operating assets$3,000,000At the beginning of this year, the company has a $900,000 investment opportunity with the following characteristics: Sales$1,530,000 Contribution margin ratio 30% of salesFixed expenses$306,000 The company's minimum required rate of return is 20%.The residual income for this year's investment opportunity when considered alone is closest to:
A. $153,000
B. ($27,000)
C. $179,100
D. $0
Answer: B
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Indicate whether the statement is true or false
On January 2, 2010, Lester Company, a calendar-year company, issued $40,000 of notes payable, of which $10,000 is due on January 2 for each of the next four years. The proper balance sheet presentation on December 31, 2010, is
a. Current Liabilities, $40,000. b. Current Liabilities, $10,000; Long-Term Liabilities, $30,000. c. Long-Term Liabilities, $40,000. d. Current Liabilities, $30,000; Long-Term Liabilities, $10,000.
When applying the lower-of-cost-or-market rule to inventory valuation, market generally means
A) original cost, less physical deterioration. B) replacement cost. C) original cost. D) resale value.
Matthews Company has a policy of maintaining an inventory of finished goods equal to 30 percent of the following month's sales. For the forthcoming month of March, Matthews has budgeted the beginning inventory at 30,000 units and the ending inventory at 33,000 units. This suggests that
a. February sales are budgeted at 10,000 units less than March sales. b. March sales are budgeted at 10,000 units less than April sales. c. February sales are budgeted at 3,000 units less than March sales. d. March sales are budgeted at 3,000 units less than April sales.