(Answered)-8.10 Queens, Inc., is a prod ucer and distributor of various motorized recreational scoo...

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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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