1. Business
  2. Accounting
  3. i need the answer to number 1...

Question: i need the answer to number 1...

Question details

United States Motors Inc. (USMI) manufactures automobiles and light trucks and distributes them for sale to consumers through franchised retail outlets. As part of the franchise agreement, dealerships must provide monthly financial statements following the USMI accounting procedures manual. USMI has developed the following financial profile of an average dealership that sells 1,700 new vehicles annually AVERAGE DEALERSHIP FINANCIAL PROFILE Composite Income Statement Sales Cost of goods sold $34,000,000 28,856,00e $ 5,950,000 Gross profit Operating costs Variable Mixed Fixed 977,500 2,618,000 2,101,200 $253, 300 Operating income

USMI is considering a major expansion of its dealership network. The vice president of marketing has asked Jack Snyder, corporate controller, to develop some measure of the risk associated with the addition of these franchises. Jack estimates that 90% of the mixe costs shown are variable for purposes of this analysis. He also suggests performing regression analyses on the various components the mixed costs to more definitively determine their variability. Required: 1. Calculate the composite dealership profit if 2,300 units are sold 3. The regression equation that Jack Snyder developed to project annual sales of a dealership has an Rsquared of 60% and a standard error of the estimate of $5,100,000. If the projected annual sales for a dealership total $32,300,000, determine thee approximate 95% confidence interval for Jacks prediction of sales. (Hn: The 95% confidence interval uses 2 standard errors in determining the interval.)

I need the answer to number 1.

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution