PDT Co. has two divisions, East and West. Invested assets and condensed income statement data for each division for the past year ended December 31 are as follows: East Division West Division Revenues $1,200,000 $800,000 Operating expenses 950,000 640,000 Service department charges 145,000 72,000 Invested assets 800,000 500,000 a. Prepare condensed income statements for the past year for each division. PDT Co. Divisional Income Statements For the Year Ended December 31, 20-- East Division West Division Revenues Operating expenses Operating income before service department charges Service department charges | x Operating income b. Using the expanded expression, determine the profit margin, investment turnover, and rate of return on investment for each division. Round your answers to two decimal places and do not enter the percent sign (for example, enter 10.25% a "10.25"). East Division West Division Profit margin X % x % Investment turnover Rate of return on investment X % X %

PDT Co. has two divisions, East and West. Invested assets and condensed income statement data for each division for the past year ended December 31 are as follows: East Division West Division Revenues $1,200,000 $800,000 Operating expenses 950,000 640,000 Service department charges 145,000 72,000 Invested assets 800,000 500,000 a. Prepare condensed income statements for the past year for each division. PDT Co. Divisional Income Statements For the Year Ended December 31, 20-- East Division West Division Revenues Operating expenses Operating income before service department charges Service department charges | x Operating income b. Using the expanded expression, determine the profit margin, investment turnover, and rate of return on investment for each division. Round your answers to two decimal places and do not enter the percent sign (for example, enter 10.25% a "10.25"). East Division West Division Profit margin X % x % Investment turnover Rate of return on investment X % X %

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter14: Decentralized Operations

Section: Chapter Questions

Problem 14.5.2P

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Championship Sports Inc. operates two divisionsthe Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: The bases to be used in allocating expenses, together with other information, are as follows: a. Advertising expenseincurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, 375,000; Summer Sports Division, 715,000. b. Transportation expenseallocated to divisions at a rate of 4.00 per bill of lading: Winter Sports Division, 17,500 bills of lading; Summer Sports Division, 30,500 bills of lading. c. Accounts receivable collection expenseincurred at headquarters, allocated to divisions at a rate of 1.00 per invoice: Winter Sports Division, 25,000 sales invoices; Summer Sports Division, 43,000 sales invoices. d. Warehouse expenseallocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 60,000 square feet; Summer Sports Division, 90,000 square feet. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Provide supporting computations for support department allocations.
Bentz Co. has two divisions, A and B. Invested assets and condensed income statement data for each division for the year ended December 31 are as follows: Division A Division B Revenues $190,000 $125,500 Operating expenses 112,500 92,750 Support department allocations 29,500 12,625 Invested assets 225,000 99,000 a. Prepare condensed income statements for the past year for each division. Deferred expense Invested assets Operating income before support department allocations Revenues Support department allocations Bentz Co. Divisional Income Statements For the Year Ended December 31 Division A Division B $fill in the blank 9c7615fbffbd07a_2 $fill in the blank 9c7615fbffbd07a_3 fill in the blank 9c7615fbffbd07a_5 fill in the blank 9c7615fbffbd07a_6 $fill in the blank 9c7615fbffbd07a_8 $fill in the blank 9c7615fbffbd07a_9 fill in the blank 9c7615fbffbd07a_11 fill in the blank 9c7615fbffbd07a_12 Operating income…
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2. Using the DuPont formula, determine the profit margin, investment turnover, and return on investment for each division. (Round to 2nd decimal places). 3. If management desires a minimum acceptable rate of return of 8%, determine the residual income for each division. 4. Discuss the evaluation of the two divisions, using the performance measures determined in parts (1), (2), and (3).
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The vice president of operations of Recycling Industries is evaluating the performance of two divisions organized as investment centers. Invested assets and condensed income statement data for the past year for each division are as follows: Business Division Consumer Division Sales $2,100,000 $2,480,000 Cost of goods sold 1,250,000 1,330,000 Operating expenses 598,000 827,600 Invested assets 750,000 2,066,667 Required: 1. Prepare condensed divisional income statements for the year ended December 31, 20Y8, assuming that there were no service department charges. 2. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment for each division. If required, round your answers to one decimal place. 3. If management desires a minimum acceptable return on investment of 19.00%, determine the residual income for each division. Use the minus sign to indicate a negative income. Round your…