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    Block Corp, Stevenson Corp, Anderson Co, Divis

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    MA_U10_44-50: please see attachment for problems.

    44. The following financial information was summarized from the accounting records of Block Corporation for the current year ended December 31:
    Software
    Division Hardware
    Division Corporate
    Total
    Cost of goods sold $47,200 $30,720
    Direct operating expenses 27,200 20,040
    Net sales 95,000 64,000
    Interest expense $ 2,040
    General overhead 18,160
    Income tax 4,700

    The gross profit for the Software Division is _______.
    $47,800
    $20,600
    $13,240
    $33,280

    45. Stevenson Corporation had $275,000 in invested assets, sales of $330,000, income from operations amounting to $49,500 and a desired minimum rate of return of 7.5%. The rate of return on investment for Stevenson is _______.
    8%
    10%
    18%
    7.5%

    46. The Anderson Company has sales of $4,500,000. It also has invested assets of $2,000,000 and operating expenses of $3,600,000. The company has established a minimum rate of return of 7%.
    What is Anderson Company's profit margin?

    20%
    80%
    44.4%
    18%

    47. In an investment center, the manager has the responsibility for and the authority to make decisions that affect _______.
    the assets invested in the center, but not costs and revenues
    costs and assets invested in the center, but not revenues
    both costs and revenues for the department or division
    not only costs and revenues, but also assets invested in the center

    48. Assume that Division P has achieved income from operations of $165,000 using $900,000 of invested assets. If management desires a minimum rate of return of 8%, the residual income is _______.
    $72,000
    $13,200
    $185,000
    $93,000

    49. The condensed income statement for a business for the past year is presented as follows:
    Product
    F G H Total
    Sales $300,000 $220,000 $340,000 $860,000
    Less variable costs 180,000 190,000 220,000 590,000
    Contribution margin $120,000 $ 30,000 $120,000 $270,000
    Less fixed costs 50,000 50,000 40,000 140,000
    Income (loss) from oper. $ 70,000 $ (20,000) $ 80,000 $130,000

    Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. What is the amount of change in net income for the current year that will result from the discontinuance of Product G?
    $20,000 increase
    $30,000 increase
    $20,000 decrease
    $30,000 decrease

    50. The condensed income statement for a business for the past year is as follows:
    Product
    T U
    Sales $600,000 $320,000
    Less variable costs 540,000 220,000
    Contribution margin $ 60,000 $100,000
    Less fixed costs 145,000 40,000
    Income (loss) from operations $ (85,000) $ 60,000

    Management is considering the discontinuance of the manufacture and sale of Product T at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product U. What is the amount of change in net income for the current year that will result from the discontinuance of Product T?
    $60,000 increase
    $85,000 increase
    $85,000 decrease
    $60,000 decrease

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    44. The following financial information was summarized from the accounting records of Block Corporation for the current year ended December 31:
    Software
    Division Hardware
    Division Corporate
    Total
    Cost of goods sold $47,200 $30,720
    Direct operating expenses 27,200 20,040
    Net sales 95,000 64,000
    Interest expense $ 2,040
    General overhead 18,160
    Income tax 4,700

    The gross profit for the Software Division is _______.
    $47,800
    $20,600
    $13,240
    $33,280

    95,000 - 47,200 = 47,800

    45. Stevenson Corporation had $275,000 in invested assets, sales of $330,000, income from operations amounting to $49,500 and a desired minimum rate of return of 7.5%. The rate of return on investment for Stevenson is _______.
    8%
    10%
    18%
    7.5%

    49,500/275,000 = 18%

    46. The Anderson Company has sales of $4,500,000. It also has ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer the gross profit for the Software Division.

    $2.19

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