Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 4 Fowler Electronics produces colour plasma screens in its Windsor, Ontario, plant. The screens are then shipped to the company's plant in Detroit, Michigan,
Question 4 Fowler Electronics produces colour plasma screens in its Windsor, Ontario, plant. The screens are then shipped to the company's plant in Detroit, Michigan, where they are incorporated into finished televisions. Although the Windsor plant never sells plasma screens to any other assembler, the market for them is competitive. The market price is $783 per screen. Variable costs to manufacture the screens are $363. Fixed costs at the Windsor plant are $1,819,000 per period. The plant typically manufactures and ships 10,000 screens per period to the Detroit plant. Taxes in Canada amount to 30% of pretax income. The Canadian plant has total assets of $19,360,000. The Detroit plant incurs variable costs to complete the televisions of $115 per set (in addition to the cost of the screens). The Detroit plant's fixed costs amount to $4,301,000 per period. The 10,000 sets produced each period are sold for an average of $2,480 each. The U.S. tax rate is 45% of pretax income. The U.S. plant has total assets of $31,260,000. All dollar amounts are after exchange rate corrections. Your answer is partially correct. Try again. Determine the return on investment for each plant if the screens are transferred at variable cost. (Round answers to 2 decimal places, e.g. 25.25%. Show a negative answers preceded by a minus sign, e.g.-25.25 or parentheses, e.g. (25.25).) Windsor Detroit ROI at variable cost -9.40 27.95 % %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started