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Saved Question 2 (5 points) Listen Fulton Company has a maximum capacity level of 65,000 units per month. Each unit regularly sells for $7. Unit

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Saved Question 2 (5 points) Listen Fulton Company has a maximum capacity level of 65,000 units per month. Each unit regularly sells for $7. Unit costs at this level are: Direct materials $0.55 Direct labor $0.80 Variable overhead $0.20 Fixed overhead $0.25 Marketing - fixed $0.35 Marketing - variable $0.45 Current monthly sales are 65,000 units. Cherokee Company has contacted Fulton Company about purchasing 7,000 units at $4.50 each. The special order would require $1 per unit for shipping. Fulton is now selling 65,000 units through regular channels each period, which require $0.40 per unit for shipping. Marketing costs would not be incurred on the special order. What is Fulton Company's change in operating profits if the special order is accepted? Question 1 (5 points) 4) Listen saved Following is information on two divisions: Division A Division B Sales margin 6.0% 7.0% Capital turnover 8.2 5.6 Which of the following must be true? Division A has higher ROI than Division B Division A has higher RI than Division B Division B generates relatively more revenues from its investments than Division A Division B has higher ROI than Division A Question 3 (5 points) Saved Listen Foods Enterprise is a multi-division company. The current ROI for Foods Enterprise as a whole is 11%, and Foods Enterprise has a minimum required rate of return on all investments of 10%. Currently the Boxed Candy Division has average total assets of $2,000,000 with operating income of $400,000. The manger of the Boxed Candy division is considering the purchase of a small company called Truffles Inc. The purchase of Truffles Inc. will require an investment of $800,000 and will increase the Boxed Candy Division operating income by $76,000. Bonuses in all the Foods Enterprise Divisions are awarded to mangers with increasing ROI's. Given the current bonus structure within Foods Enterprise and assuming the managing of the Boxed Candy Division is a self maximizing individual; you would expect the Boxed Candy Division to: Purchase Truffles Inc. Not purchase Truffles Inc

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