8.10 Queens, Inc., is a prod ucer and distributor of various motorized recreational scoo motorcycle prod ucts. The Brooklyn division handles scooters and would like to ea rate of return of 20 percent. The Brooklyn division will change its unit selling price to provide this return. The following data are available on the division and its pr Variable cost per scooter $200 Total annual fixed costs $1,220,000 Long-run normal demand Average opera ting assets owned by the division 10,000 units each $1,400,000 1. Compute the per-uni t selling price that will provide the desired rate of return 2. Assume that actual sales fluctua te from 8,500 units to 11,500 units. Compute turnover, and ROI that would be realized on sales at the 8,500-, 10,000-, an levels of activity. (Use the selling price computed in part 1 for your computat 3. Explain what your computations in part 2 suggest to you insofar as rate-of-return formula to divisions subject to cyclical movement in the econo
Solution ID:10137780 | Question answered on 16-Oct-2016
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