Average rate of return-new product Oahu Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 7,200 units at $254 per unit. The equipment has a cost of $803,500, residual value of $60,500, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Cost per unit: Direct labor Direct materials Factory overhead (including depreciation) Total cost per unit Determine the average rate of return on the equipment. If required, round to the nearest whole percent. $43.00 168.00 28.60 $239.60

Average rate of return-new product Oahu Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 7,200 units at $254 per unit. The equipment has a cost of $803,500, residual value of $60,500, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Cost per unit: Direct labor Direct materials Factory overhead (including depreciation) Total cost per unit Determine the average rate of return on the equipment. If required, round to the nearest whole percent. $43.00 168.00 28.60 $239.60

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 3E: Average rate of returnnew product Hana Inc. is considering an investment in new equipment that will...

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Show Me How Print Item Average rate of return-new product Oahu Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 40,000 units at $80 per unit. The equipment has a cost of $7,400,000, residual value of $600,000, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Cost per unit: Direct labor Direct materials Factory overhead (including depreciation) Total cost per unit Determine the average rate of return on the equipment. % $5 35 10 $50
Average rate of return-new product Hana Inc.is considering an invetment in new equipment that will be used to manufacture a smart-phone.The phone is expected to generate additional annual sales of 10,000 units at $300 per unit. The equipment has a cost of $ 4,500,000,residual value of $500,000,and a 10-year life.The equipment can only be used to manufacture the phone.The cost to manufacture the phone follows: Determine the average rate of return on the equipment.
Average rate of return—new product Oahu Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 6,600 units at $270 per unit. The equipment has a cost of $675,200, residual value of $50,800, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Line Item Description Amount Cost per unit:    Direct labor $45.00    Direct materials 174.00    Factory overhead (including depreciation) 29.55       Total cost per unit $248.55 Determine the average rate of return on the equipment. If required, round to the nearest whole percent.
Average rate of return—new product Oahu Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 6,600 units at $270 per unit. The equipment has a cost of $675,200, residual value of $50,800, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Line Item Description Amount Cost per unit:    Direct labor $45.00    Direct materials 174.00    Factory overhead (including depreciation) 29.55       Total cost per unit $248.55 Determine the average rate of return on the equipment. If required, round to the nearest whole percent.fill in the blank 1 of 1 %
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