Calculations Shown

Part 1:             

Factoring resource constraints into product mix decisions             

Rose Incorporated manufactures two types of vases, small and large. The following per-unit data are available.             

  Small Vase   Large Vase         

Sale price    $60    $100          

Variable costs    $35    $60          

Machine hours required for 1 vase 1 2             

Total fixed costs are $600,000, and Rose Incorporated can sell a maximum of 25,000 units of each type of vase annually. Machine hour capacity is 50,000 hours per year.

a. Determine the contribution margin per unit for each type of vase.             

b. Determine the contribution margin per machine hour for each type of vase.             

c. Determine the number of units of each style of vase that Rose Incorporated should produce to maximize operating income.             

d. What is the dollar amount of the maximum operating income as calculated in C above?             

Part 2:

Financial Statement Analysis

The following information relates to Harris Corporation.

Account Current year Prior year

Account

Net sales (all credit)

Cost of goods sold

Gross profit

Income from operations

Interest expense

Net income

Cash

Accounts receivable, net

Inventory

Prepaid expenses

Total current assets

 Total long-term assets

Total current liabilities

Total long-term liabilities

Common stock, no par,

3,000 shares, value $50/share

Required:

a. What is the acid-test ratio for the current year?

b. What is the inventory turnover for the current year?

c. What is days' sales in receivables for the current year?

d. What is the book value per share of common stock for the current year?

e. What is the price-earnings ratio for the current year?

f. What is the rate of return on total assets for the current year?

g. What is the times-interest-earned ratio for the current year?

h. What is the current ratio for the current year?