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PLEASE ANSWER WITH COMPLETE SOLUTION AND EXPLANATION RUSH ASAP Problem 1RP: Chapter: CH11 Problem: 1RP The manager of the Bartram Division of United Products Company
PLEASE ANSWER WITH COMPLETE SOLUTION AND EXPLANATION RUSH ASAP
Problem 1RP: Chapter: CH11 Problem: 1RP The manager of the Bartram Division of United Products Company has given you the following information related to budgeted operations for the coming year, 1975. Sales (100,000 units at $5) Variable costs at $2 per unit Contribution margin at $3 per unit Fixed costs Divisional profit Divisional investment $500,000 200,000 $300,000 120,000 S180,000 $800,000 The minimum required ROI is 20%. Required Consider each part independently. 1. Determine the division's expected ROI using the expanded second formula. 2. Determine the division's expected RI. 3. The manager has the opportunity to sell an additional 10,000 units at $4.50. Variable cost per unit would be the same as budgeted, but fixed costs would increase by $10,000. Additional investment of $50,000 would also be required. If the manager accepts the special order, by how much and in what direction will I change? 4. Bartram's budgeted volume includes 20,000 units that Bartram expects to sell to the Jeffers Division of United Products. However, the manager of Jeffers Division has received an offer from an outside company to supply the 20,000 units at $4.20. If Bartram Division does not meet the $4.20 price, Jeffers will buy from the outside company. Bartram could save $25,000 in fixed costs if it dropped its volume from 100,000 to 80,000 units. (a) Determine Bartram's profit assuming that it meets the 54.20 price. (b) Determine Bartram's profit if it fails to meet the price and loses the sales. (c) Determine the effect on the company's total profit if Bartram meets the $4.20 price. (d) Determine the effect on the company's total profit if Bartram does not meet the priceStep by Step Solution
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