The service division of Sheffield Industries reported the following results for 2022. Sales $550,000 Variable costs 330,000 Controllable fixed costs 68,750 Average operating assets 687,500 Management is considering the following independent courses of action in 2023 in order to maximize the return on investment for this division. 1. Reduce average operating assets by $137,500, with no change in controllable margin. 2. Increase sales $110,000, with no change in the contribution margin percentage. (a) Compute the controllable margin and the return on investment for 2022.

The service division of Sheffield Industries reported the following results for 2022. Sales $550,000 Variable costs 330,000 Controllable fixed costs 68,750 Average operating assets 687,500 Management is considering the following independent courses of action in 2023 in order to maximize the return on investment for this division. 1. Reduce average operating assets by $137,500, with no change in controllable margin. 2. Increase sales $110,000, with no change in the contribution margin percentage. (a) Compute the controllable margin and the return on investment for 2022.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 13E: The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as...

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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?
The Atlantic Division of Oriole Productions Company reported the following results for 2022: Sales Variable costs Controllable fixed costs Average operating assets Management is considering the following independent alternative courses of action in 2023 in order to maximize the return on investment for the division. 1. 2. 3. (a) $4,032,000 3,213,504 314,000 2,514,000 Reduce controllable fixed costs by 10% with no change in sales or variable costs.. Reduce average operating assets by 10% with no change in controllable margin. Increase sales $500,000 with no change in the contribution margin percentage. Compute the return on investment for 2022. (Round answer to 1 decimal place, e.g. 52.5.) Return on Investment Save for Later % Attempts: 0 of 1 used (b) The parts of this question must be completed in order. This part will be available when you complete the part above. Submit Answer
Company A reported the following results for 2021:Sales $4,000,000Variable costs 3,200,000Controllable fixed costs 300,000Average operating assets 2,500,000 Management is considering the following independent alternative courses of action in 2022 in order to maximize the return on investment for the division.1. Reduce controllable fixed costs by 10% with no change in sales or variable costs.2. Reduce average operating assets by 10% with no change in controllable margin.3. Increase sales $500,000 with no change in the contribution margin percentage.Instructions(a) Compute the return on investment for 2021.(b) Compute the expected return on investment for each of the alternative courses of action.
Company A reported the following results for 2021: Sales $4,000,000 Variable costs 3,200,000 Controllable fixed costs 300,000 Average operating assets 2,500,000 Management is considering the following independent alternative courses of action in 2022 in order to maximize the return on investment for the division. Reduce controllable fixed costs by 10% with no change in sales or variable Reduce average operating assets by 10% with no change in controllable Increase sales $500,000 with no change in the contribution margin Instructions Compute the return on investment for 2021 Compute the expected return on investment for each of the alternative courses of action
2. The Gustavo Industries in São Paulo, Brazil, reported the following results for 2020 (currency in Brazilian real, R$):« Sales R$ 400,000,000- 320,000,000- 40,800,000- 280,000,000- Variable costs Controllable fixed costs Average operating assets Gustavo's Management is considering the following independent courses of action in 2021 in order to maximize the return on investment for this division: Option1: Reduce average operating assets by R$ 80,000,000 with no change in controllable margin. Option2: Increase sales R$ 80,000,000 with no change in the contribution margin percentage. A. Compute the controllable margin and the return on investment for 2020. (25%)- B. Compute the controllable margin and the expected return on investment for each proposed option. (25%)-
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Shalom Company provided the following data pertaining to its Peace Department: Margin on sales Minimum required rate of return Return on investment Turnover Average operating assets Sales 10% 18% 25% 2.50 40,000 100,000 Suppose you were presented Project Piss that has ROI of 22% and residual income of P1,900. Will Peace Department consider accepting the project? Yes or no? Use the underlined words as your choice. Input answers in capital letters.