BU330 Accounting for managers

| July 29, 2018

BU330 Accounting for Managers Part 1: Factoring resource constraints into product mix decisions Rose Incorporated manufactures two types of vases, small and large. The following per-unit data are available. Small Vase Large Vase Sale price $60 $100Variable costs $35 $60Machine hours required for 1 vase 1 2 Total fixed costs are $600,000, and Rose Incorporated can sell a maximum of 25,000 units of each type of vase annually. Machine hour capacity is 50,000 hours per year. a. Determine the contribution margin per unit for each type of vase. b. Determine the contribution margin per machine hour for each type of vase. c. Determine the number of units of each style of vase that Rose Incorporated should produce to maximize operating income. d. What is the dollar amount of the maximum operating income as calculated in C above? Part 2: Financial Statement Analysis The following information relates to Harris Corporation. Account Current year Prior yearNet sales (all credit) $520,125 $499,500Cost of goods sold $375,960 $353,600Gross profit $144,165 $145,900Income from operations $ 95,500 $ 79,900Interest expense $ 23,500 $ 19,500Net income $ 57,600 $ 51,600Cash $ 30,600 $ 15,900Accounts receivable, net $ 33,800 $ 23,200Inventory $ 42,000 $ 30,300Prepaid expenses $ 2,000 $ 1,500Total current assets $ 108,400 $ 70,900Total long-term assets $ 62,000 $ 38,000Total current liabilities $ 46,000 $ 41,600Total long-term liabilities $ 20,000 $ 22,700Common stock, no par,3,000 shares, value $50/share $ 30,000 $ 30,000 Required: a. What is the acid-test ratio for the current year? b. What is the inventory turnover for the current year? c. What is days’ sales in receivables for the current year? d. What is the book value per share of common stock for the current year? e. What is the price-earnings ratio for the current year? f. What is the rate of return on total assets for the current year? g. What is the times-interest-earned ratio for the current year? h. What is the current ratio for the current year?

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