all else constant, what would digby’s sg&a/sales ... Question All else constant,
ID: 2725398 • Letter: A
Question
all else constant, what would digby’s sg&a/sales ... Question All else constant, what would Digby’s SG&A/Sales ratio be if the company had spent an additional $1,500,000 for Daft’s promotional budget and $750,000 for Daft’s sales budget? Select: 1Save Answer 11.4% 10.9% 9.5% 8.2%
Production Information
Name
Primary Segment
Units Sold
Unit Inven tory
Revision Date
Age Dec.31
MTBF
Pfmn Coord
Size Coord
Price
Material Cost
Labor Cost
Contr. Marg.
2nd Shift &
Over-
time
Auto mation Next Round
Capacity Next Round
Plant Utiliz.
Drum
Thrift
2,157
256
6/10/2019
2.6
17000
9.8
10.2
$15.00
$6.69
$1.48
45%
42%
10.0
1,650
141%
Daft
Thrift
2,189
274
5/16/2019
2.6
17000
10.0
10.0
$15.00
$6.82
$1.44
44%
31%
10.0
1,833
130%
Deft
Core
2,150
342
12/14/2019
1.6
18000
12.5
6.8
$23.00
$9.03
$4.52
39%
52%
8.0
1,350
150%
Dim
Core
2,086
416
12/14/2019
1.6
20000
13.2
7.3
$25.00
$9.64
$4.41
42%
39%
8.0
1,550
137%
Top Products in Thrift SegmentExplanation / Answer
The question is incomplete. The information on Total Sales Value and S,G&A is missing. There be must a diagram with data containing this information. I have taken the values from a similar question available online to calculate the ratio. The figures can be different.
_________
Solution:
Current Sales Budget = 155,581
Revised Sales Budget = 155,581 + 750 = $156,331
Current S,G&A = 15,691
Revised S,G&A = 15,691 + 1,500 + 750 = $17,941
________
Using the revised values in the formula, we get,
S,G&A/Sales = 17,941/156,331 = 11.47% or 11.5% (which is closest to Option A)
________
Notes:
You need to refer to the income statement and check the figures for current S,G&A and Sales Value. If they are different, you just have to change the current figures and calculate the ratio as provided above.
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