A Company Reported Net Income for Year 1 of $98,000

question 147

Essay

A company reported net income for Year 1 of $98,000 and $106,000 for Year 2. It also reported net sales of $835,000 in Year 1 and $918,000 in Year 2. The company's average total assets in Year 1 were $1,850,000 and $1,720,000 in Year 2. Calculate the company's profit margin, total asset turnover and return on total assets for Year 1 and Year 2. Comment on the results.

Understand the treatment and implications of material price variances.

Understand the applications of standard cost systems in production and cost control.

Identify the difference between theoretical standards and practical standards and their effect on employee motivation and performance evaluation.

Understand the concept and application of standard costs in cost management and product costing.

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Definitions:

Acquisition Behavior

The process by which individuals learn to acquire new information or behaviors through observation, conditioning, or practice.

Biological Predisposition

A natural tendency or inclination to behave or react in a particular way, often with a genetic basis influencing susceptibility to specific conditions or diseases.

Observational Learning

The process of learning behaviors by watching and imitating others, as identified in the social learning theory.

Operant Conditioning

A learning process in which the strength of a behavior is modified by reinforcement or punishment, a concept developed by B.F. Skinner.