The Chewy Chocolate Division of the Delight Confection Company Had

question 108

Essay

The Chewy Chocolate Division of the Delight Confection Company had a rate of return on investment (ROI)of 12 percent (= $1,200,000/$10,000,000)during Year 5,based on sales of $20,000,000.In an effort to improve its performance during Year 6,the company instituted several cost-saving programs,including the substitution of automatic equipment for work previously done by workers and the purchase of raw materials in large quantities to obtain quantity discounts.Despite these cost-saving programs,the company's ROI for Year 6 was 10 percent (= $1,100,000/$11,000,000),based on sales of $20,000,000.
Required:
a.Break down the ROI for Year 5 and Year 6 into profit margin and investment turnover ratios.
b.Explain the reason for the decrease in ROI between the two years using the results from part a.

Calculate total, variable, and fixed costs based on given data.

Understand the relationship between marginal cost and average total cost and how it influences production decisions.

Recognize the significance of economies of scale in production.

Understand the distinction between fixed costs and variable costs and their behaviour in production.

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Definitions:

#define SQUARE(x)

A preprocesser macro in C that calculates the square of its argument x.

Macro Definition

A preprocessor directive in programming that defines a sequence of code that can be reused throughout the program with a single identifier.

#define SQUARE(x)

An example of a macro definition in C/C++ that calculates the square of a given number x using a preprocessor directive.

Macro Definition

A preprocessor directive in programming that defines a piece of code that can be reused throughout the program with a single identifier.