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Exam (elaborations) ADMS Atkinson Faculty of Liberal & Professional Studies ADMS2510 3.0 Final Examination With Correct Answers $12.49   Add to cart
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Exam (elaborations) ADMS Atkinson Faculty of Liberal & Professional Studies ADMS2510 3.0 Final Examination With Correct Answers

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You have been hired by the President of Electric Motors & Computing Corp. (EM&CC) to provide advice on 3 issues. EM&CC has a number of divisions, each with their own manager. The following information is taken from the 2003 accounting records of East Coast Marketing, a division of EM&CC. Sales ...

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  • February 26, 2024
  • 8
  • 2023/2024
  • Exam (elaborations)
  • Questions & answers

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  • exam elaborations adms
  • you have been hired by the president of electric m
  • sales variable costs 4000000
  • asset turnover salesassets

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YORK UNIVERSITY: Atkinson Facu lty of Liberal & Professional Stud ies
ADMS2510 3.0 Final Examination: Winter 2005: 13 April 2005: 7-10 pmth
Solutions:
Question 1: (25 marks):
You have been hired by the P resident of Electric Motors & Computing Corp. (EM&CC) to provide advice o n 3 issues. EM&CC has a number of divisions, each with their own manag er. The following information is t aken from the 2003 accounti ng records of East Coast Marketing, a division of EM&CC.
Sales $12,000,000
Variable costs 4,000,000
Contribution margin $ 8,000,000
Direct fixed costs 5,000,000
Segment income $ 3,000,000 =========
At the beginning and end o f 2003, East Coast Marketing ha d total assets of $6,000,000 and $4,000,000 r espectively.
Required: Issue 1: (6 marks)
1a) Compute the asset turnover rati o (2 marks)
Asset turnover = sales/asset s = $12,000,000/$6,000,000 = 2 times
Or, using average asset s: $12,000,000/$5,000,000 = 2. 4 times
1b) Calculate the profit margin rat io (based on segment inc ome) (2 marks)
Profit margin = income/ sales = $3,000,000/$12,000,000 = 25 %
1c) Calculate the return on investme nt (2 marks).
ROI = income/asset s = $3,000,000/$6,000,000 = 50%
Or, using average asset s = $3,000,000/$5,000,000 = 60% Issue 2: (8 marks):
The Cambridge Division of EM & C C manufactures circuit breakers. The company evaluates managers on t he basis of both financial and no n-financial results. The following dat a relate to the throughput o f the Cambridge plant:
Units started into production: 350,000;
Good units completed: 300,000;
Total production hours: 20,000;
Value-added production hours: 17,500.
Required: 2a) Calculate the manufacturing cyc le efficiency (2 marks):
Manufactu ring cycle efficiency = value added time/t otal time:
17,500/20,000 = 87.5%
2b) Calculate the process product ivity (2 marks);
Process productivit y = total units processed/value-added t ime:
350,000/17,5 00 hours = 20 units per hour
2c) Calculate the process quality y ield (2 marks):
Process quality yield = good u nits/total unit s processed:
300,000/350,000 = 85.7%
2d) Calculate the throughput pe r hour (2 marks):
Throughpu t = good units/total time:
300,000/20,000 = 15 un its per hour
(Check: Throughpu t = MCE * PP * PQY = 87.5% * 20 * 85.7% = 15)

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