The Frozen Foods Division of Northern Territory Products is planning the 2019 operating budget.Average operating assets of $4 500 000 will be used during the year and unit selling prices are expected to average $50 each.Variable costs of the division are budgeted at $1 200 000,while fixed costs are set at
$500 000.The company's required rate of return is 20%.
Required:
a.Calculate the sales volume necessary to achieve a 22% ROI.
b.The division manager receives a bonus of 50% of residual income.What is his anticipated bonus for 2019,assuming he achieves the 22% ROI from part (a)?
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The Answer of The Frozen Foods Division of Northern Territory Products is planning the 2019 operating budget.Average operating assets of $4 500 000 will be used during the year and unit selling prices are expected to average $50 each.Variable costs of the division are budgeted at $1 200 000,while fixed costs are set at
$500 000.The company's required rate of return is 20%.
Required:
a.Calculate the sales volume necessary to achieve a 22% ROI.
b.The division manager receives a bonus of 50% of residual income.What is his anticipated bonus for 2019,assuming he achieves the 22% ROI from part (a)?
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The Frozen Foods Division of Northern Territory Products Is Planning