The Following Data Are Available for the South Division of Manhattan

question 64

Multiple Choice

The following data are available for the South Division of Manhattan Products,Inc.and the single product it makes:
$$\begin{array} { | l | r | } \hline \text { Unit selling price } & \$ 20 \\\hline \text { Variable cost per unit } & \$ 12 \\\hline \text { Annual fixed costs } & \$ 280,000 \\\hline \text { Average operating assets } & \$ 1,500,000 \\\hline\end{array}$$ How many units must South sell each year to have an ROI of 16%?

• A) 240,000.
• B) 1,300,000.
• C) 52,000.
• D) 65,000.

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Definitions:

After-tax Income

The amount of income left after all federal, state, and withholding taxes have been deducted.

Tax Rate

The rate at which taxes are levied on the income of a person or company.

FIFO

"First-In, First-Out," an inventory valuation method assuming goods are sold in the order they are acquired, affecting the cost of goods sold and ending inventory.

Average-cost Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all similar items available during the period.