Stacy Yoo, president of Caremore, Inc, an appliancemanufacturer in Seattle, Wash

Question

Stacy Yoo, president of Caremore, Inc, an appliancemanufacturer in Seattle, Washington, has been trying to decidewhether on e of her productline managers, Bill Mann, has beenachieving the companywide return on sales target of 45%. Stacy has just recived data from the new target costing systemregarding Bill's operation. Bill's sales volume was 300,000appliances with an average selling price of $500 and expensestotaling $90 million. a. Determine whether Bill's return on sales ratio hasmet the companywide target. Has Bill done a good or poorjob? Explain. Stacy Yoo, president of Caremore, Inc, an appliancemanufacturer in Seattle, Washington, has been trying to decidewhether on e of her productline managers, Bill Mann, has beenachieving the companywide return on sales target of 45%. Stacy has just recived data from the new target costing systemregarding Bill's operation. Bill's sales volume was 300,000appliances with an average selling price of $500 and expensestotaling $90 million. a. Determine whether Bill's return on sales ratio hasmet the companywide target. Has Bill done a good or poorjob? Explain.

Explanation / Answer

Expenses = $90,000,000
$150,000,000 - $90,000,000 = $60,000,000
$60,000,000 / $150,000,000 = 40%
Therefore, the company only achieved a return on sales of 40%,so bill has done a poor job.

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