Question
The new CEO, Robert, of Accounting Manufacturing has asked for a variety of information about the operations of the firm from last year. The CEO
The new CEO, Robert, of Accounting Manufacturing has asked for a variety of information about the operations of the firm from last year. The CEO is given the following information, but with some data missing:
| Total sales revenue | ? |
| Number of units produced and sold | 650,000 units |
| Selling price | ? |
| Operating income | 750,000 |
| Total investment in assets | 5,000,000 |
| Variable cost per unit | $4.25 |
| Required rate of return | 12% |
| Fixed cost for the year | $2,500,000 |
5) If the CEO gets a straight salary of $300,000 and a bonus of 5% of residual income, if ROI is above the required rate of return by 2%, how much will the CEO receive in total compensation? Do you think the CEO made the right choice regarding firm value or did the CEO try to maximize his own compensation.
*There were previous questions prior, please let me know if you need them/their answers in order to be able to answer this question.
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Wiley CPA Exam Review Auditing And Attestation 2011
Authors: Patrick R. Delaney, O. Ray Whittington
8th Edition
0470554347, 978-0470554340
