Haresh RevenuesCost of salesSelling, General andAdministrative (all fixed)Corporate overheadRegion IRegion II$ 1,212,000456,000$ 1,662,000816,000438,000648,000Region III$ 2,262,0001,146,000868,000TotalCorporation$ 5,136,0002,418,0001,954,000456,000Information on the division assets in the three regions of Lauderdale Corporation follows:Region IRegion IIRegion III$ 712,000642,0001,305,500Lauderdale Corporation has a cost of capital of 8.6 percent.The individual regions are responsible for research and development (R&D) decisions and for current liabilities. Information on R&Dexpenditures (which are included in SG&A) for the year and current liabilities for the three regions follows:R&D expendituresCurrent liabilitiesRegion I$174,000114,000Region II$ 234,000164,000Region III$ 474,000214,000R&D expenditures are assumed to be incurred uniformly over the period and are expected to generate benefits for three years.Required:a. Compute economic value added for the three regions. Ignore taxes.b. How have these regions performed?

a. Economic Value Added (EVA) for the three regions:Region I:Revenue: $1,212,000Cost of Sales:…

Answered: Revenues Cost of sales Selling, General…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 6SEB

See similar textbooks

Similar questions

Vortex Company operates a retail store with two departments. Information about those departments follows. Department A $800,000 497,000 Department B $450,000 291,000 Sales Cost of goods sold Direct expenses: 125,000 20,000 24,000 21,000 7,000 88,000 10,000 14,000 12,000 5,000 Salaries Insurance Utilities Depreciation Maintenance The company also incurred the following indirect costs. $36,000 6,000 15,000 50,000 Salaries Insurance Depreciation Office expenses Indirect costs are allocated as follows: salaries on the basis of sales; insurance and depreciation on the basis of square footage; and office expenses on the basis of number of employees. Additional information about the departments follows. Number of employees Square footage 28,000 12,000 Department A 75 50 Required: 1. Determine the departmental contribution to overhead and the departmental net income for department A and Department B. 2. Should Department B be eliminated?
Revenues Cost of sales Selling, General and Region I $ 1,209,000 454,500 433,500 Region II $ 1,659,000 814,500 643,500 Region III $ 2,259,000 1,144,500 863,500 Total Corporation $ 5,127,000 2,413,500 1,940,500 Administrative (all fixed) Corporate overhead Information on the division assets in the three regions of Lauderdale Corporation follows: Region I Region II $ 709,000 639,000 1,301,000 450,000 Region III Lauderdale Corporation has a cost of capital of 8.6 percent. Required: a. Compute residual income for the three regions. Ignore taxes. b. How have these regions performed?
An entity identified the following segment for the current year: Segment Revenue Profit Assets A 10,000,000 1,750,000 20,000,000 B 8,000,000 1,400,000 17,500,000 C 6,000,000 1,200,000 12,500,000 D 3,000,000 550,000 7,500,000 E 4,000,000 575,000 5,500,000 F 2,000,000 525,000 3,000,000 What are the reportable segments? a. SEGMENT A, B and C b. SEGMENT A, B, C and D c. SEGMENT A, B, C, D and E d. SEGMENT A, B, C, D, E and F
The following results are available for Division X and Y:Division X Division YProfit before interest and tax P185 000 P172, 000Capital employed P1, 540, 000 P1, 650, 000The cost of capital is 10%.Calculate and comment on the performance of the departments based on:a. Return on capital employed (4 marks)b. Residual incom
Sales revenue Variable expenses Contribution margin Fixed expenses Operating income Income taxes Net income $ 236,352 95,012 15,897 $11,128 $ · b. $537,356 $ 168,652 90,292 23,508 98,944 138,768 16,027 $48,081 d $667,836 453,504 59,104 $177,312
Divisional Income Statements 1. Admin Expenses, Operating Income before Support Department Allocations, Sales, Suuport Department Allocations. 2. Admin Expenses, Cost of Goods Sold, Gross Profit, Support Department Allocations 3. Gross Profit, Operating Income, Sales, Support Department Allocations 4. Admin Expenses, Cost of Goods Sold, Gross Profit, Support Department Allocations 5. Cost of Goods Sold, Operating Income before Support Department Allocations, Sales, Support Department Allocations 6. Gross Profit, Loss from Operations, Sales, Support Department Allocations 7. Gross Profit, Loss from Operations, Operating Income, Operating Income before Support Department Allocations
The following are available for divison X and Y Profit before interest and tax X 185 000 Y172 000 Capital employed X 1 540 000 Y 1 650 000 The cost of capital is 10% comment on the performance of the departments based on a. Return on capital employed b.residual income
Service department charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of 64,560, and the Purchasing Department had expenses of 40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: A. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. B. Using the cost driver information in (A), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. C. Why does the Residential Division have a larger support department allocation than the other two divisions, even though its sales are lower?
The sales, gross profit, and direct and indirect operating expenses of Departments A and B of Cardoba Inc. are as follows: Dept. ADept. BTotalSales$420,000$290,000$710,000Gross profit243,000197,000440,000Direct operating expenses205,000118,000323,000Indirect operating expenses160,000Required:Compute the departmental direct operating margin and direct operating margin percentage for each department.
Net Income Planning Selected operating data for Oakbrook Company in four independent situations are shown below. Fill in the blanks for each independent situation. Sales Variable expense Fixed expense Net income (loss) before tax Units sold Unit contribution margin Contribution margin ratio $ $ A $350,000 0 a. 0 b. $25,000 30,000 $5.20 $ B 0 C. $ $ $111,000 $62,000 $15,000 0 d. $7.00 C 0 e. 0 f. $ $53,200 $28,800 0.4 D $520,000 0 g. $178,000 $(22,000) 0 h.
Profit Center Responsibility Reporting for a Service Company Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: Revenues—N Region $1,030,800 Revenues—S Region 1,192,300 Revenues—W Region 2,190,000 Operating Expenses—N Region 653,200 Operating Expenses—S Region 709,600 Operating Expenses—W Region 1,324,400 Corporate Expenses—Dispatching 567,500 Corporate Expenses—Equipment Management 188,600 Corporate Expenses—Treasurer’s 156,800 General Corporate Officers’ Salaries 346,200 The company operates three service departments: the Dispatching Department, the Equipment Management Department, and the Treasurer’s Department. The Dispatching Department manages the scheduling…
Profit Center Responsibility Reporting for a Service CompanyThomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, as profit centers.The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues.The following quarterly income and expense accounts were provided from the trial balance as of December 31:Revenues—N Region $3,780,000Revenues—S Region 5,673,000Revenues—W Region 5,130,000Operating Expenses—N Region 2,678,500Operating Expenses—S Region 4,494,890Operating Expenses—W Region 3,770,050Corporate Expenses—Dispatching 182,000Corporate Expenses—Equipment Management 1,200,000Corporate Expenses—Treasurer's 734,000General Corporate Officers' Salaries 1,380,000The company operates three service departments: the Dispatching Department, the Equipment Management Department,and the Treasurer's Department. The Dispatching Department manages the scheduling and releasing of completed…

SEE MORE QUESTIONS

Recommended textbooks for you

College Accounting, Chapters 1-27

Accounting

ISBN:

9781337794756

Author:

HEINTZ, James A.

Publisher:

Cengage Learning,

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

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

Publisher:

South-Western College Pub

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

College Accounting, Chapters 1-27

Accounting

ISBN:

9781337794756

Author:

HEINTZ, James A.

Publisher:

Cengage Learning,

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

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

Publisher:

South-Western College Pub

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS