The cookie shoppe expects sales of $437,500 next year. the profit margin is 4.8 percent and the firm has a 30 percent dividend payout ratio. what is the projected increase in retained earnings? a. $16,231
b. $17,500
c. $18,300
d. $20,600
e. $21,000

Projected Increase in Retained Earnings = $16231.25

so correct option is a. $16231

Explanation:

given data

sales = $437,500

profit margin = 4.8 percent

dividend payout ratio = 30 %

to find out

projected increase in retained earnings

solution

we get here first Expected Profit that is express as

expected Profit = Sales × Profit Margin   1

expected Profit = 437500 × 5.3%

expected Profit = $23187.50

and Dividends is here as

Dividends = Expected Profit × Dividend Payout Ratio   2

Dividends = 23187.50  × 30%

Dividends = $6956.25

Projected Increase in Retained Earnings will be

Projected Increase in Retained Earnings = expected Profit - Dividends   3

Projected Increase in Retained Earnings  = $23187.50 - $6956.25

Projected Increase in Retained Earnings = $16231.25

so correct option is a. $16231

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o

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