A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sectorindustry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round yourintermediate calculations.)SalesNet operating income.Average operating assetsReturn on investment (ROI)Minimum required rate of return:PercentageDollar amountResidual income$Company A400,000Company B$690,000$Company C670,000$37,000$154,000$142,00024 %17%%13 %%10 %$44,000$5,000

Return on Investment -Return on Investment calculates the profit or loss based on the capital…

mily friend has asked your help in analyzing the operations of three anonymous companies operating in the same service secto ustry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round your rmediate calculations.) les et operating income werage operating assets eturn on investment (ROI) inimum required rate of return: Percentage Dollar amount Residual income $ Company A 400,000 Company B Company C S 690,000 S 670,000 S 37,000 $ 154,000 $ 142,000 24 % 17% % 13% % 10 % $ 44,000 $ 5,000

mily friend has asked your help in analyzing the operations of three anonymous companies operating in the same service secto ustry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round your rmediate calculations.) les et operating income werage operating assets eturn on investment (ROI) inimum required rate of return: Percentage Dollar amount Residual income $ Company A 400,000 Company B Company C S 690,000 S 670,000 S 37,000 $ 154,000 $ 142,000 24 % 17% % 13% % 10 % $ 44,000 $ 5,000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 5PA: Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an...

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Forchen, Inc., provided the following information for two of its divisions for last year: Required: 1. For the Small Appliances Division, calculate: a. Average operating assets b. Margin c. Turnover d. Return on investment (ROI) 2. For the Cleaning Products Division, calculate: a. Average operating assets b. Margin c. Turnover d. Return on investment (ROI) 3. What if operating income for the Small Appliances Division was 2,000,000? How would that affect average operating assets? Margin? Turnover? ROI? Calculate any changed ratios (round to four significant digits).
Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are included in the information, but you will need to calculate the values. A. In the correct format, prepare the income statement using the following information: B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. C. Prepare a short response to accompany the income statement that explains why uncontrollable costs are included in the income statement.
The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department allocations): The manager of the Consumer Products Division is considering ways to increase the return on investment. a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that 143,750,000 of assets have been invested in the Consumer Products Division. b. If expenses could be reduced by 3,450,000 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division?
A family friend has asked your help in analyzing the operations of three anonymous companies operatingin the same service sector industry. Supply the missing data in the table below:CompanyA B CSales .............................................................. $9,000,000 $7,000,000 $4,500,000Net operating income ................................... $ ? $ 280,000 $ ?Average operating assets ............................. $3,000,000 $ ? $1,800,000Return on investment (ROI) .......................... 18% 14% ?Minimum required rate of return:Percentage ................................................ 16% ? 15%Dollar amount ............................................ $ ? $ 320,000 $ ?Residual income ............................................ $ ? $ ? $ 90,000
Krall Company recently had a computer malfunction and lost a portion of its accounting records. The company has reconstructed some of its financial performance measurements including components of the return on investment calculations.Required:Help Krall rebuild its information database by completing the following table: (Do not round your intermediate calculations. Round your final answers to 2 decimal places, (i.e. 0.1234 should be entered as 12.34%.).) Return on Investment Profit Margin Investment Turnover Operating Income Sales Revenue Average Invested Assets % % $50,000.00 $714,000.00 $1.550.000.00 % 9.80 % 0.50 $1,23,970.00 $2,530,000.00 % 15.70 % 1.15 $1,955,000.00 11.10 % % 2.80 $505,000.00
A company is a wholesale distributor of electronic equipment who has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales P 1,000,000Variable expenses 390,000Contribution Margin 610,000Fixed Expenses 625,000Net operating Income (loss) P(15,000) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central WestSales P250,000 P400,000 P350,000Variable expenses as a percentage of sales 52% 30% 40%Traceable Fixed Expenses P160,000 P200,000 P175,000 Required: a. Prepare a contribution format income statement segmented by the division. East Central West b. The marketing department has proposed increasing the West Division’s monthly advertising by P15,000 believing that it…
Bovine Company, a wholesale distributor of umbrellas, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales $ 2,070,000 Variable expenses 895,880 Contribution margin 1,174,120 Fixed expenses 1,319,000 Operating loss $ (144,880 ) In an effort to isolate the problem, the president has asked for an income statement segmented by geographic market. Accordingly, the Accounting Department has developed the following: Geographic Market South Central North Sales $ 607,000 $ 806,000 $ 657,000 Variable expenses as a percentage of sales 50 % 36 % 46 % Traceable fixed expenses $ 320,000 $ 480,000 $ 307,000 Required:1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. 2-a. The company’s sales manager believes that sales in the Central…
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales $ 1,644,000 Variable expenses 608,620 Contribution margin 1,035,380 Fixed expenses 1,139,000 Net operating income (loss) $ (103,620) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 444,000 $ 650,000 $ 550,000 Variable expenses as a percentage of sales 48% 27% 40% Traceable fixed expenses $ 282,000 $ 335,000 $ 200,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $20,000 based on the belief that it would increase that division's sales by 14%. Assuming…
Comparative data on three companies in the same service industry are given below:CompanyA B CSales ....................................................... $600,000 $500,000 $ ?Net operating income .............................. $ 84,000 $ 70,000 $ ?Average operating assets ........................ $300,000 $ ? $1,000,000Margin ...................................................... ? ? 3.5%Turnover .................................................. ? ? 2ROI .......................................................... ? 7% ?Required:1. What advantages are there to breaking down the ROI computation into two separate elements, marginand turnover?2. Fill in the missing information above, and comment on the relative performance of the three companiesin as much detail as the data permit. Make specific recommendations about how to improve the ROI.
The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department charges): Sales $210,000,000 Cost of goods sold 117,200,000 Gross profit $92,800,000 Administrative expenses 67,400,000 Operating income $25,400,000 The manager of the Consumer Products Division is considering ways to increase the return on investment. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $125,550,000 of assets have been invested in the Consumer Products Division. Round your answers for the profit margin and the rate of return on investment to the nearest whole number, round your answer for the…
Krall Company recently had a computer malfunction and lost a portion of its accounting records. The company has reconstructed some of its financial performance measurements including components of the return on investment calculations. 1. Help Krall rebuild its information database by completing the following table: Note: Round your intermediate calculations to 2 decimal places. Round your final answers to 2 decimal places, (i.e. 0.1234 should be entered as 12.34%.). Return on Investment Profit Margin Investment Turnover Operating Income Sales Revenue Average Invested Assets $51,000.00 $709,000.00 $1,420,000.00 4.06% 9.90% 0.41 $105,128.10 $2,590,000.00 24.14% 14.20% 1.70 $3,043,000.00 11.205 5.09% 2.20 $519,000.00
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales $ 1,610,000 Variable expenses 659,000 Contribution margin 951,000 Fixed expenses 1,046,000 Net operating income (loss) $ (95,000) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 430,000 $ 610,000 $ 570,000 Variable expenses as a percentage of sales 52 % 34 % 40 % Traceable fixed expenses $ 288,000 $ 321,000 $ 193,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $29,000 based on the belief that it would…