Hydraulic Hoses, Incorporated produces specialized industrial hoses for applications such as high-pressure hydraulics and the transference of highly corrosive materials, The company has recently implemented an ABC system for three of its products, and is interested in evaluating its effectiveness before converting to an ABC system for all products. To perform this evaluation the company compiled data for the three products using both the traditional system and the new ABC system. The traditional system used a single driver (direct material costs) The ABC system uses a variety of cost drivers related to the activities used to produce the hoses. The three products involved in the trial run of the ABC system were D-13, K-17, and R-23. The following data relate to these products, and unit data have been rounded to the nearest penny. Total Costs Allocated: Cost per Unit: Selling Price Traditional Traditional Total Cost Cost per Unit Product per Unit Units Produced Costing Costing Allocated: ABC ABC D-13 $ 15.05 270, 600 $ 2, 349, 000 $ 8.70 $ 2, 241, 000 $ 8.30 K- 17 16-60 180, 060 1, 764, 000 9 .80 1 , 710, 000 9 . 50 R-23 18 00 25 , 000 287 , 000 11.48 449 , 000 17.96 Totals $ 4, 400, 900 $ 4, 400 , 000 Required: a. Determine the gross profit margin for each product produced based on the ABC data b. Determine the gross profit margin for each product produced based on the traditional costing data Complete this question by entering your answers in the tabs below. Required A Required B Determine the gross profit margin for each product produced based on the traditional costing data. Product Traditional Margin D-13 K-17 R-23 Assume Walton Modems Incorporated (WMI) is a division of Gilmore Business Products (GBP). GBP uses ROI as the primary measure of managerial performance, GBP has a desired return on investment (ROI) of 6.40 percent. The company has $280,000 of investment funds to be assigned to its divisions. The president of WMI is aware of an investment opportunity for these funds that is expected to yield an ROI of 7.40 percent. Income Statement Sales revenue $ 780,900 Cost of goods sold (545, 000 Gross margin $ 235,000 Sales commission ( 48,000) Depreciation expense (13,090 Administrative expense (75 ,550) Net income $ 98, 450 Balance Sheet Assets: Cash $ 753, 450 Manufacturing equipment, net of accumulated depreciation 370,000 Office equipment, net of accumulated depreciation 45, 060 Total assets $ 1, 168,450 Equity: Common stock $ 1, 070,000 Retained earnings 198, 450 Total equity $ 1, 168, 450 Required a-1. Calculate the existing ROI for WMI. a-2. Based on your computations will the president of WMI accept or reject the $280,000 investment opportunity? c-1. Calculate the estimated residual income of the new investment opportunity c-2. Based on the residual income would the president of WMI accept or reject the $280,000 investment opportunity? Complete this question by entering your answers in the tabs below. Reg Al and A2 Req C1 and C2 Calculate the existing ROI for WMI. Based on your computations will the president of WMI accept or reject the $280,000 investment opportunity? Note: Round your answer to 2 decimal places. (i.e., .2345 should be entered a-1. ROI a-2. Based on your computations, will the president of WMI accept or reject the investment opportunity?Assume Walton Modems Incorporated (WMI) is a division of Gilmore Business Products (GBP). GBP uses ROI as the primary measure of managerial performance. GBP has a desired return on investment (ROI) of 6.40 percent. The company has $280,000 of investment funds to be assigned to its divisions. The president of WMI is aware of an investment opportunity for these funds that is expected to yield an ROI of 7.40 percent. Income Statement Sales revenue $ 780,060 Cost of goods sold (545 , 000) Gross margin $ 235,000 Sales commission (48, 090) Depreciation expense (13, 090) Administrative expense (75, 550) Net income $ 98,450 Balance Sheet Assets : Cash $ 753, 450 Manufacturing equipment, net of accumulated depreciation 370,000 Office equipment, net of accumulated depreciation 45,000 Total assets $ 1, 168, 450 Equity: Common stock $ 1, 070, 090 Retained earnings 98, 450 Total equity $ 1, 168, 450 Required a-1. Calculate the existing ROI for WMI. a-2. Based on your computations will the president of WMI accept or reject the $280,000 investment opportunity? c-1. Calculate the estimated residual income of the new investment opportunity c-2. Based on the residual income would the president of WMI accept or reject the $280,000 investment opportunity? Complete this question by entering your answers in the tabs below. Reg Al and A2 Req C1 and C2 Calculate the estimated residual income of the new investment opportunity, Based on the residual income would the president of WMI accept or reject the $280,000 investment opportunity? c-1. Residual income c-2. Based on residual income, would the president of WMI a reject the investment opportunity?The management of Campbell Modems, Incorporated (CMI) is uncertain as to the volume of sales that will exist in Year 1. The president of the company asked the chief accountant to prepare flexible budget income statements assuming that sales activity amounts to 6,000 and 8,000 units. The static budget is shown in the following form. Required a. Complete the following worksheet to prepare the appropriate flexible budgets b. Calculate and show the flexible budget variances for the static budget versus the flexible budget at 8.000 units. c. Indicate whether each variance is favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). CAMPBELL MODEMS, INCORPORATED Flexible Budget Income Statements Cost per Static unit Budget Flexible Budgets Volume Variance Number of units 7.000 6,000 8,000 Sales revenue $ 105 $ 735.000 Variable manufacturing costs Materials 40 280,000 Labor 20 140 000 Overhead 15 35,000 Variable selling, general & administrative 7 49,000 Contribution margin 231,000 Fixed costs Manufacturing rent 54.000 Depreciation on manufacturing equipment 64.000 Selling, general & administrative expenses 78 150 Depreciation on administrative equipment 16,000 Net income (loss) $ 18 850 5 (14 150) $ 51,850