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Lesson 4 Variable Costing Individual Assignment[1]

# Lesson 4 Variable Costing Individual Assignment[1] -...

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Lesson 4 Variable Costing Individual Assignment Write your solutions to the following textbook problems. Submit them for evaluation via the dropbox. Complete: E16-1, E16-5, E16-7, and E 16-8, (p. 744-749). Exercise 16-7: Selected Financial Ratios 1. Gross margin percentage : Gross Margin/Sales \$127,500/ \$420,000= 30.4% (rounded) 2. Current Ratio: Current assets/current liabilities \$115,000/\$50,000= 2.3 3. Acid-test Ratio: (Cash + Marketable securities + Accounts receivable + Short- Term notes receivable) / current liabilities \$6,500 + \$0 + \$35,000 + \$0 / \$50,000 = 0.83 4. Debt to equity Ratio: Total liabilities/Stockholders’ equity \$130,000/\$170,000= 0.76 (rounded) 5. Average collection period: 365 days/Accounts receivable turnover Accounts Receivable Turnover= \$420,000/\$25,000= 16.8 365/\$16.8= 22 days (rounded) 6. Average sale period: 365 days/Inventory turnover Inventory Turnover=\$292,000/\$60,000= 4.9 (rounded)

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Unformatted text preview: 365/4.9= 74 days (rounded) 7. Times interest earned ratio: Earnings before interest expense and income taxes/interest expense \$38,000/\$8,000= 4.75 8. Book value per share: (Total stockholders equity – Preferred stock) / Number of common shares outstanding \$170,000-\$0/\$6,000= \$28.00 per share (rounded) Exercise 16-8: Selected Financial Ratios for Common Stockholders 1. Earnings per share: (Net income- Preferred dividends) / Average number of common shares outstanding \$21,000-\$0/\$6,000= \$3.50 per share 2. Dividend payout ratio: Dividends per share/ Earnings per share \$2.10 per share/\$3.50 per share= 60% 3. Dividend yield ratio: Dividends per share/ Market Price \$2.10 per share/ \$42per share= 5% 4. Price-earnings ratio: Market price per share/ Earnings per share \$42 per share/\$3.50 per share= 12...
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Lesson 4 Variable Costing Individual Assignment[1] -...

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