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Week4 ROIC Tree Group Exercise

- The company produces 396 tables per year and generates $1,188,000 in annual sales with a 3.96% margin. - Total annual costs are $1,140,900 including $570,000 in indirect costs, $570,900 in direct costs, and $148,500 in material costs. - The company uses 12 workers paid $20 per hour for a total annual labor cost of $422,400 and materials costing $10 per kg with 30 kg needed per table.

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刘春晓
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46 views

Week4 ROIC Tree Group Exercise

- The company produces 396 tables per year and generates $1,188,000 in annual sales with a 3.96% margin. - Total annual costs are $1,140,900 including $570,000 in indirect costs, $570,900 in direct costs, and $148,500 in material costs. - The company uses 12 workers paid $20 per hour for a total annual labor cost of $422,400 and materials costing $10 per kg with 30 kg needed per table.

Uploaded by

刘春晓
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Unit Price Number of Workers

$ 3,000 12

Hours of Labor
Available per Time per Worker
Sales per Year Year (hours) = 220 x 8
$ 1,188,000 21120 1760
Flow Rate
Table per Year
Labor Content per
396 table
Return on Sales Hours of Labor
(margin) per Table 40 Setup Time % per Table
3.96% 53.33 15%
ROIC % Idle Time per Table
12.27% Total Cost 25% Wait Time % per Table
$ 1,140,900 10%
Rent
$ 150,000

Marketing
$ 100,000
Indirect Costs
$ 570,000 Management
$ 180,000

Finishing
$ 60,000

Depreciation
$ 80,000

Hours Available per


Year
Labor Costs 21120
$ 422,400
Wages per Hour
Direct Costs $ 20
$ 570,900
Flow Rate
Table per Year Wood Price per kg
Material Costs 396 $ 10
kg Wood per
$ 148,500 Table
Material Costs per Total kg Wood per
Table Table 30
$ 375 37.5
% Scrape
Sales per Year additional wood
Asset Turns (Capital
Turnover) $ 1,188,000 Fixed Capital Raw Materials 25%
3.09 $ 450,000 $ 20,000
Inventory
Total Capital $ 70,000 Work in Process
$ 383,875 $ 50,000

Material Costs
Pre-paid
Expense $ 148,500
Working Capital $ 12,375
Payment Terms One
$ (66,125) Month = 1/12
0.0833

Flow Time =
Three Months
Unearned
Revenues 0.25 Sales per Year
$ 148,500 $ 1,188,000
Down Payments
$ 594,000 % Down payment
50%

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