Video images is a distributor of dvds. quick-disk mart is a local retail outlet which sells blank and recorded dvds. quick-disk mart purchases tapes from video images at $3.00 per dvd. dvds are shipped in packages of 20. video images pays all incoming freight, and quick-disk mart does not inspect the dvds due to video images reputation for high quality. annual demand is 104,000 dvds at a rate of 4,000 dvds per week. quick-disk mart earns 20% on its cash investments. the purchase-order lead time is two weeks. the following cost data are available: relevant ordering costs per purchase order $90.50 carrying costs per package per year: relevant insurance, materials handling, breakage, etc., per year $ 4.50 what is the required annual return on investment per package? a. $12.00 b. $2.50 c. $60.00 d. $0.60

Exercise 6-2 variable costing income statement; explanation of difference in net operating income [lo6-2] ida sidha karya company is a family-owned company located on the island of bali in indonesia. the company produces a handcrafted balinese musical instrument called a gamelan that is similar to a xylophone. the gamelans are sold for $970. selected data for the company’s operations last year follow: units in beginning inventory 0 units produced 200 units sold 180 units in ending inventory 20 variable costs per unit: direct materials $ 130 direct labor $ 300 variable manufacturing overhead $ 30 variable selling and administrative $ 15 fixed costs: fixed manufacturing overhead $ 63,000 fixed selling and administrative $ 25,000 the absorption costing income statement prepared by the company’s accountant for last year appears below: sales $ 174,600 cost of goods sold 139,500 gross margin 35,100 selling and administrative expense 27,700 net operating income $ 7,400 required: 1. under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. prepare an income statement for last year using variable costing.