A business assignment. All the information and questions can be found in the attachment. Please do not plagiarize and please save it as a PDF file
a) Total Marks: 5
b) You are required to do it independently.
c) A final answer without any necessary steps of work (where needed) will get no credit. Please don’t directly copy and paste the class notes or information from other sources.
d) I am indifferent towards hand written or typed submission.
e) No late submission please.Please submit to the Dropbox on Student Portal (Moodle).
f) The questions are based on Ch.12, Ch.13, Ch.14.
Q1. Please solve the following three questions based on the materials from Chapter 12. (2 points)
(1) Please find the break-even point ($BEP) (Production level to break even) based on the following conditions: CMP (Contribution Margin Percentage) = 30% and TFC (Total Fixed Costs) = $90,000
(2) Please find the Production level ($Y) to achieve 5% RPP (Required Profit percentage) if CMP = 20% and TFC (Total Fixed Costs) = $80,000
(3) A flood will hit the farm soon and now it’s harvest time of strawberry. Please use the following condition to decide whether you should harvest the strawberries or not (Use two different methods (short-run and long-run) to solve this question as discussed in class).
- We Invested $25 per plant of strawberry
- Going in to harvest what is left will cost an additional $15 per plant (the variable cost) for a total cost $40 per plant
- It is expected to yield 4 kilogram per plant and market price of strawberry is $3/kilogram
Q2. A supervisor of inventory control in a diary product factory is generating a total inventory cost report for pasturized milk . He has the following information: The price of pasturized milk is $25/gallon, the carrying cost percentage is 5%, the annual use is 600 gallon and the cost of placing an order is $700. It usually takes 5 days to get an order. (1 points)
(1) Find the Economic Order Quantity (EOQ)?
(2) What is the total costs (Minimized total costs)?
(3) reorder point(ROP)?
Q3. Consider the Following Cases and determine if there is the NWC change and how the NWC change. (Hint: NWC=Current Asset – Current Liability) (1 point)
Case 1: Inventory purchase is paid by using long – term (more than one year) loan and it is not matured
Case 2: Inventory purchase is paid by using long – term loan within this year (accounting period) and it should be paid off in cash within accounting period.
Q4. Using the information of the attached Balance Sheet and Profit and Loss Statement (Attached as follows), Calculate the following ratios.
(The PPt lecture notes (chapter 14) have all the related formula ) (Please show the detailed calculation and problem-solving steps. Any direct answer without detailed problem-solving steps will earn 0 point) (1 Point)
1) Net Working Capital (year 1)=
Net working capital (year 2)=
2) Current Ratios in year 1=
Current Ratios in year 2=
Quick Ratios in year 1 =
Quick Ratios in year 2=
Acid Test Ratios in year 1=
Acid Test Ratios in year 2=
3)Debt to Solvency ratios in year 1=
Debt to Solvency ratios in year 2=
Times interest Earned Ratios in year 1 =
Times interest Earned Ratios in year 2=
4) Inventory turn over ratio in year 1 =
Inventory turn over ratio in year 2=
5) The account receivable turnover ratio in year 1 and year 2. (If Credit sale is 10% of the total sales)
The account payable turnover ratio in year 1 and year 2. (If Credit sale is 25% of the goods purchased)
6) Return on invested capital ratio in year 1=
Return on invested capital ratio in year 2=
Return on owner’s equity ratio in year 1=
Return on owner’s equity ratio in year 2=
Profit as a percentage of sales ratio in year 1=
Profit as a percentage of sales ratio in year 2=
(Please see the balance sheet and P&L statement on the next page!)