1)Work backwards to calculate cost of goods manufactured in 2016 for iRobot Company using the data given with one change: Use $45673 for ending finished goods inventory for 2016 instead of $45,86

2)

Suppose the US Government puts a tariff on Chinese imports and that cost of goods manufactured and ending inventory is increased by 8% during 2016. Beginning inventory is not impacted.

Calculate gross margin for 2016. Round your answer to the nearest whole dollar.

3)

One of the risks listed in the iRobot report was as follows:

We face intense competition from other providers of robots, including diversified technology providers, as well as competition from providers offering alternative products, which could negatively impact our results of operations and cause our market share to decline.

Suppose in 2016 iRobot's competitor came out with a new robotic vacuum that cleans house better and also dusts as well. It also can hold a decent conversation. Sales of the Roomba plummet. Units sold decrease by 36%. Assume that unit sales price for their products is $223 and unit product cost is $125. How much would gross margin change in 2016 if these events had happened?

HINT: Analyze this change in gross margin just from the information above, you do not need to go back to the financial statements. The sales and cost data from the financial statements reflect different unit sales price and cost information so that will throw your calculations off.

No need to put a negative sign on your answer - it is assumed that whatever number you input will be a decrease.

4)

iRobot's report said:

We anticipate that in 2017, selling & marketing expenses will increase in absolute dollars and as a percentage of revenue.

IF: Sales and marketing expense increase by 15% Sales in 2017 are the same as 2016 In 2017, what is sales and marketing expense as a percentage of revenue? Round your percentage to two decimal places, for example .1678 should be input as 16.78. Do not use a percentage sign.

5)

Suppose iRobot manufactured 1647 more units in 2016 than reflected in their financial statements. Suppose these units had an average cost of $116 each. Units sold are unchanged at 2,943 units.

Compute iRobot's revised cost of goods sold for 2016 to incorporate the additional units that were manufactured.

Assume all other data is as presented in the financial statements. Round your answer to the nearest whole dollar.

Balance Sheet for iRobot
All numbers in thousands
	12/31/2016	12/31/2015
Cash	214,523	179,915
Short Term Investments	39,930	33,124
AR	72,909	104,679
Unbilled Revenue	139	452
Raw Materials	4,717	9,082
Work in Process	0	0
Finished Goods	45,861	52,596
Other Current Assets	5,591	9,501
Total Current Assets	383,670	389,349
PP&E	27,532	26,850
Goodwill	41,041	48,751
Intangible Assets	12,207	15,664
Other assets	43,462	41,129
	507,912	521,743
AP	67,281	61,655
Accrued Expenses	19,854	15,954
Salaries Payable	21,015	15,752
Unearned Revenue	4,486	3,265
Total Current Liabilities	112,636	96,626
Long Term Liabilities	6,310	7,706
Common Stock	162,016	232,400
Retained Earnings	226,950	185,011
Total Stockholder's Equity	388,966	417,411
Total Liab & SE	507,912	521,743
Income Statement for iRobot
Sales	660,604	616,778
COGS	341,289	327,852
Gross Margin	319,315	288,926
Operating Expenses:
Research and Development	79,805	76,071
Selling & Marketing	115,125	97,772
General and Admin	66,828	54,465
Total Operating Expenses	261,758	228,308
Operating Income	57,557	60,618
Other income	3,804	2,353
Income Before Taxes	61,361	62,971
Income Tax Expense	19,422	18,841
Net Income	41,939	44,130
Units Shipped (sold)	2,943	2,436