Exhibit 12 In Addition a Regression Analysis Indicates the Following Relationship Between

question 29

Multiple Choice

Exhibit 12.6
Use the Information Below for the Following Problem(S)
Consider the following information that you propose to use to obtain an estimate of year 2004 EPS for the MacLog Company.
$\begin{array}{lrr}\begin{array}{l}\\\\\text{GDP}\\\text{GDP growth}\\\text{Sales per share}\\\text{Operating profit margin}\\\text{Depreciation/Fixed Assets}\\\text{Fixed asset turnover}\\\text{Interest rate}\\\text{Total asset turnover}\\\text{Debt/Total assets}\\\text{Tax rate}\\\end{array}\\begin{array}{r}\\\text{Year 2003}\\\hline\text{11,000 Billion}\\\\ \$ 800 \\\\\\\\\\\\\\\\end{array}\\begin{array}{r}Estimated\\\text{Year 2004}\\\hline\\ 3.5 \% \\\\ 12 \% \\ 14 \% \\2\\3.5 \% \\ 0.7 \\45 \% \\36\%\end{array}\\end{array}$
In addition a regression analysis indicates the following relationship between growth in sales per share for MacLog and GDP growth is
%D Sales per share = 0.015 + 0.75(%∆GDP)
-Refer to Exhibit 12.6.Estimate the firm's sales per share for the year 2004.

• A) $833.04
• B) $900.08
• C) $885.03
• D) $925.56
• E) $850.75

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Definitions:

Raw Material Inventory

The total stock of basic materials awaiting processing into finished goods within a manufacturing or production facility.

Finished Goods Inventory

The stock of completed products that are ready to be sold but have not yet been sold.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or services, based on estimated costs and activity levels.

Applied Overhead

Costs related to production that are not directly tied to a specific product but allocated based on a formula or measure.