Luse Boats, Inc. makes lusury speed boats for water skiing. Actual results and the static budget for the year are presented below.

Sales commissions are computed at $5\%$ of qross sales. The expected ROl for this subsidiary is $26\%.$

The budqet was based on $100$ boats beinq sold. Actual sales for the year was $80$ boats. The showroom is $10,000$ square feet.

Manaqement has a policy of reviewinq in more detail any overall budqet wariances in excess of $10\%$ if the amount is $$10,000$ or qreater

Compute the flexible budget based on actual units sold and the gross profit percentage used for the static budget.

Actual Ilex Varianc. FIU Flex Budgetales Varianc FIU $$tatic Budgererall Varian Compute the return on investment using average total assets.

a$.$ Auerage total assets

round to the nearest whole dollar

b$.$ Return on investment

round to the nearest tenth percent

c$.$ Did the company meet, exceed, or fall short of expectations?

Compute residual income.

round to the nearest whole dollar

$($a$)$ What is the expectation for average sale price per the static budget:

round to the nearest whole dollar

$($b$)$ What was the actual average sales price?

round to the nearest whole dollar

$($a$)$ What is the expectation for sales per square foot per the static budge

$($b$)$ What was the actual sales per square foot?

round to the nearest whole dollar

round to the nearest whole dollar

$($a$)$ What is the expected gross profit margin per the statio budget?

$($b$)$ What was the actual gross profit margin?

round to the nearest tenth percent

round to the nearest tenth percent

$($a$)$ What is the expected operating profit margin per the static budget?

$($b$)$ What was the actual operating profit margin?

round to the nearest tenth percent

round to the nearest tenth percent

Assume the company also uses inventory turnover as a $\frac{K}{P}$I $.$

The formula for the inventory turnover ratio is cost of goods sold divided by averaqe inventory.

$($a$)$ What is the expected inventory turnover per the static budget?

$($b$)$ What was the actual inventory turnover?

round to the nearest hundredth

round to the nearest hundredth

$8\mathrm{.}1$Also compute the inventory turnover in days.

The formula is $365$ days divided by inventory turnover ratio.

$($a$)$ What is the expected inventory turnover, in days, per the static budge

round to the nearest day

$($b$)$ What was the actual inventory turnower, in days?

round to the nearest day

What do you conclude from all of this information?