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Scott quit a $30,000-a-year job with a local heating and air conditioning firm to go into business for himself.

Scott quit a $30,000-a-year job with a local heating and air conditioning firm to go into business for himself. After his first year in business, his accountant showed him an income statement, which indicated Scott’s firm had a profit of $40,000. During this year Scott had drawn a salary of $20,000.
Scott's accounting profit is ___________.
Answer
1.92308 points
Question 2

Scott quit a $30,000-a-year job with a local heating and air conditioning firm to go into business for himself. After his first year in business, his accountant showed him an income statement, which indicated Scott’s firm had a profit of $40,000. During this year Scott had drawn a salary of $20,000.
Scott's entrepreneurial profit is ________________ .
Answer
1.92308 points
Question 3

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.
The monthly fixed expenses are _______________.
Answer
1.92308 points
Question 4

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.
The contribution margin for each doll is ___________ .
Answer
1.92308 points
Question 5

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.
The number of dolls that must be sold each month in order to break even is ___________. (Round your answer to a whole number because you can't sell part of a doll.)
Answer
1.92308 points
Question 6

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.
The dollars in sales that the firm needs to break even is ____________ . (Round your answer to the nearest whole dollar.)
Answer
1.92308 points
Question 7

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.
The firm's goal is to make $100,000 profit per month. The number of dolls that must be sold to achieve that goal is _____________. (Round your answer to a whole number.)
Answer
1.92308 points
Question 8

James builds brick walls for custom homes. His annual sales are $300,000, and his net income is $18,000. He has assets of $100,000 invested in this business.
The net profit margin for James is ____________.
Answer
1.92308 points
Question 9

James builds brick walls for custom homes. His annual sales are $300,000, and his net income is $18,000. He has assets of $100,000 invested in this business.
The asset turnover for James is ___________ .
Answer
1.92308 points
Question 10

James builds brick walls for custom homes. His annual sales are $300,000, and his net income is $18,000. He has assets of $100,000 invested in this business.
The return on investment for James is _____________ .
Answer
1.92308 points
Question 11

Use the Income Statement for Ultimate Image Corporation (shown below) to answer questions 11 through 13.
Ultimate Image Corporation
Income Statement
Fiscal Year Ended:
Dec. 31, 2011
Dec. 31, 2010



Total revenue
1,789,654
703,904
Cost of goods sold
478,963
275,963
Gross profit
1,310,691
427,941
Operating expenses
65,987
57,896
Operating income
1,244,704
370,045
Interest and taxes
544,444
289,635
Net Income
700,260
80,410



Earnings per Share
$14.01
$1.61
(50,000 shares outstanding)
The degree of operating leverage (DOL) is _______________ .
Answer
1.92308 points
Question 12

The degree of financial leverage (DFL) is _____________ . (Use the Income Statement for Ultimate Image Corp. found in question 7 to calculate your answer.)
Answer
1.92308 points
Question 13

The degree of combined leverage (DCL) is _____________ . (Use the Income Statement for Ultimate Image Corp. found in question 7 to calculate your answer.)
Answer
1.92308 points

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