Luxe Boats, Inc. makes luxury speed boats for water skiing. Actual results and the static budget for the year are presented below. Sales Compute the flexible budget based on actual units sold and the gross profit percentage used for the static budget.

$\backslash$table$[[,$Actual,Flex Variance,F$/$U$,$Flex Budget,Sales Variance,F$/$U$,$Static Budget:,Jverall Varianc,F$/$U$,$VAR$\%,$Review? $($Y$/$N$)],[$Sales Revenue,$750,000,,,,,,1,000,000,,,,],[$Cost of Goods Sold,$360,000,,,,,,500,000,,,,],[$Gross Profit,$390,000,,,,,,500,000,,,,],[$Operating Expenses$],[$Sales Commissions,$37,500,,,,,,50,000,,,,],[$Administrative Salaries and Wages $+$ Benefits,$120,000,,,,,,100,000,,,,],[$General Expenses$],[$Rent$,31,000,,,,,,30,000,,,,],[$Other expenses,$17,000,,,,,,11,500,,,,],[$Depreciation$,21,500,,,,,,22,500,,,,],[$Total Selling, General, and Administrative Expen,$227,000,,,,,,214,000,,,,],[$Operating Income,$163,000,,,,,,286,000,,,,],[,,,,,,,,,,,]]$ Compute the return on investment using average total assets.

a$.$ Average total assets

b$.$ Return on investment

round to the nearest whole dollar

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

round to the nearest tenth Dercent

Compute residual income.

round to the nearest whole dollar

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

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

round to the nearest whole dollar

round to the nearest whole dollar

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

round to the nearest whole dollar

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

round to the nearest whole dollar

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

round to the nearest tenth percent

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

round to the nearest tenth percent

Assume the company also uses inventory turnover as a KPI.

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

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

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

$8\mathrm{.}1$ 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 budget?

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

round to the nearest hundredth

round to the nearest hundredth

round to the nearest day

round to the nearest day

What do you conclude from all of this information?

commissions are computed at $5\%$ of gross sales. The expected ROI for this subsidiary is $26\%.$

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

Management has a policy of reviewing in more detail any overall budget variances in excess of $10\%$ if the amount is $$10,000$ or greater.