1.

The following data are available for the South Division of Redride Products, Inc. and the single product it makes:

Unit selling price	$24
Variable cost per unit	$13.00
Annual fixed costs	$285,600
Average operating assets	$1,700,000

How many units must South sell each year to have an ROI of 16.50%?

a. 15,300

b. 51,464

c. 23,588

d. 280,500

2.

The Reed Division reports the following operating data for the past two years:

	Year 1	Year 2
Margin	16%	?
Turnover	2.5	2
Average operating assets	?	$270,000
Net operating income	$43,200	?
Stockholders' equity	$86,400	$245,000
Sales	?	?

The return on investment at Reed was exactly the same in Year 1 and Year 2 Average operating assets in Year 1 were:

a. $216,000

b. $270,000

c. $245,000

d. $108,000

3.

The following data pertain to the Whalen Division of Northern Industries.

	Year 1	Year 2
Sales	$300,000	$600,000
Stockholders' equity	$38,000	$400,000
Average operating assets	?	?
Turnover	6.0	1.2
Return on investment	?	9.6%
Minimum required rate of return	?	7.00%
Residual income	$16,000	?

The margin at Whalen was exactly the same in Year 2 as it was in Year 1.

The return on investment in Year 1 was: (Round your intermediate calculations and final answer to 2 decimal places.)

a. 1.40%

b. 48.00%

c. 1.92%

d. 35.00%