PLUS Help I System Announcements Start Time: 07:04 PM/ Remaining: 56 min. OURCES

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PLUS Help I System Announcements Start Time: 07:04 PM/ Remaining: 56 min. OURCES -22) Question 1 Concord Corporation has gathered the following information concerning one model of shoe: Variable manufacturing costs Variable selling and administrative costs $20000 Fixed manufacturing costs Fixed selling and administrative costs $120000o Investment ROI Planned production and sales $36000 $160000 $1800000 40% 4000 pairs What is the desired ROI per pair of shoes? O $84 O $219 O $180 $223 Question Attempts: 0 of 1

Explanation / Answer

Ans.1 Option 3rd $180 *Calculation: Desired ROI per pair of shoes   =   Investment * ROI percentage / Production units 1800000 * 40% / 4000 180 Ans.2 Option 2nd 150% *Calculation: Markup percentage = Profit / Cost * 100 570000 / 380000 * 100 150% *Calculation of profit: ROI = Profit / Investment * 100 0.30 = Profit / 1900000 Profit = 1900000 * 0.30 570000 *Calculation of Total cost: Variable Manufacturing costs 50000 Variable Selling & administrative costs 50000 Fixed Manufacturing costs 160000 Fixed Selling & administrative costs 120000 Total cost 380000

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