Teck myA 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 incomeAverage operating assetsReturn on investment (ROI)Minimum required rate of return:PercentageDollar amountResidual incomeCompany ACompany BCompany C$320,000$690,000$560,000$36,000$154,000$147,00021 %17 %%16%%15 %$58,000$7,000

Company's financial position is measured by the management and investors by calculating the…

A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round your intermediate calculations.) Company A Company B Company C Average operating assets Sales Net operating income Return on investment (ROI) Minimum required rate of return: $ 320,000 $ 690,000 $ 560,000 $ 36,000 $ 154,000 21 % $ 147,000 17 % % Percentage Dollar amount Residual income 16 % % 15 % $ 58,000 $ 7,000

A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round your intermediate calculations.) Company A Company B Company C Average operating assets Sales Net operating income Return on investment (ROI) Minimum required rate of return: $ 320,000 $ 690,000 $ 560,000 $ 36,000 $ 154,000 21 % $ 147,000 17 % % Percentage Dollar amount Residual income 16 % % 15 % $ 58,000 $ 7,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assume that a company manufactures and sells a variety of products, one of which it refers to as Product A. The company is considering dropping Product A because the income statement for this product is reporting a net operating loss as shown below: Sales $ 500,000 Variable expenses: Variable manufacturing expenses $ 240,000 Sales commissions 75,000 Shipping 25,000 Total variable expenses Contribution margin 340,000 160,000 Fixed expenses: $ 65,000 35,000 Salary of product-line manager Advertising for this product General factory overhead Depreciation on equipment Insurance on this product's inventories 25,000 20,000 8,000 15,000 Purchasing department Total fixed expenses 168,000 $ (8,000) Net operating loss If Product A is dropped, the company would transfer its product-line manager to another department and discontinue a search for a new manager that the company anticipated paying a salary of $51,500. The general factory overhead and purchasing department expenses are common costs…
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A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent and other amounts to whole dollars.) Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: Percentage Dollar amount Residual income $ $ A 470,000 160,000 15 % 16 % $ $ $ Company B 680,000 43,000 19 % 57,000 % C $ 560,000 $ 145,000 $ % 10 % 5,000
When Mr. Ree Active, president and chief executive of Precious Products Inc., first saw the segmented income statement below, he flew into his usual rage: “When will we ever start showing a real profit? I'm starting immediate steps to eliminate those two unprofitable lines!” Product Lines Total U V W Sales $250,000 $100,000 $75,000 $75,000 Variable expenses 119,000 37,000 35,000 47,000 Contribution margin 131,000 63,000 40,000 28,000 Traceable fixed expenses* 98,000 31,000 37,000 30,000 Common expenses, allocated 32,900 18,000 10,500 4,400 Operating income (loss) $100 $14,000 -$7,500 -$6,400 *These traceable expenses could be eliminated if the product lines to which they are traced were discontinued. Calculate: Recommend which segments, if any, should be eliminated. Prepare a report in good form to support your answer.
A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round your intermediate calculations.) Sales Net operating income. Average operating assets Return on investment (ROI) Minimum required rate of return: Percentage Dollar amount Residual income $ Company A 400,000 Company B $ 690,000 $ Company C 670,000 $ 37,000 $ 154,000 $ 142,000 24 % 17% % 13 % % 10 % $ 44,000 $ 5,000
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A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent and other amounts to whole dollars.)