Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $300,000, have an eight-year useful life, and have a total salvage value of $20,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 200,000 Less operating expenses: Commissions to amusement houses $ 100,000 Insurance 7,000 Depreciation 35,000 Maintenance 18,000 160,000 Net operating income $ 40,000 Garrison 16e Rechecks 2017-05-22 Exercise 12-8 Part 2 2a. Compute the simple rate of return promised by the games. 2b. If the company requires a simple rate of return of at least 12%, will the games be purchased?

The chromosome manufacturing company produces two products, x and y. the company president, jean mutation, is concerned about the fierce competition in the market for product x. she notes that competitors are selling x for a price well below chromosome's price of $13.50. at the same time, she notes that competitors are pricing product y almost twice as high as chromosome's price of $12.50.ms. mutation has obtained the following data for a recent time period: product x product y number of units 11,000 3,000 direct materials cost per unit $3.23 $3.09 direct labor cost per unit $2.22 $2.10 direct labor hours 10,000 3,500 machine hours 2,100 1,800 inspection hours 80 100 purchase orders 10 30ms. mutation has learned that overhead costs are assigned to products on the basis of direct labor hours. the overhead costs for this time period consisted of the following items: overhead cost item amount inspection costs $16,200 purchasing costs 8,000 machine costs 49,000 total $73,200using direct labor hours to allocate overhead costs determine the gross margin per unit for product x. choose the best answer from the list below.a. $1.93b. $3.12c. $7.38d. $2.43e. $1.73using activity-based costing for overhead allocation, determine the gross margin per unit for product y. choose best answer from list below.a. $10.07b. ($2.27)c. ($5.23)d. ($7.02)e. $7.02