The Atlantic Division of Oriole Productions Company reported the following results for 2022: Sales Variable costs Controllable fixed costs Average operating assets 1. Management is considering the following independent alternative courses of action in 2023 in order to maximize the return on investment for the division. 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. Return on Investment Compute the return on investment for 2022. (Round answer to 1 decimal place, e.g. 52.5.) %

The Atlantic Division of Oriole Productions Company reported the following results for 2022: Sales Variable costs Controllable fixed costs Average operating assets 1. Management is considering the following independent alternative courses of action in 2023 in order to maximize the return on investment for the division. 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. Return on Investment Compute the return on investment for 2022. (Round answer to 1 decimal place, e.g. 52.5.) %

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 9E: Refer to the data given in Exercise 10.8. Required: 1. Compute the residual income for each of the...

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Refer to the data given in Exercise 10.8. Required: 1. Compute the residual income for each of the opportunities. (Round to the nearest dollar.) 2. Compute the divisional residual income (rounded to the nearest dollar) for each of the following four alternatives: a. The Espresso-Pro is added. b. The Mini-Prep is added. c. Both investments are added. d. Neither investment is made; the status quo is maintained. Assuming that divisional managers are evaluated and rewarded on the basis of residual income, which alternative do you think the divisional manager will choose? 3. Based on your answer in Requirement 2, compute the profit or loss from the divisional managers investment decision. Was the correct decision made?
Direct fixed cost controllable by of the period just ended: Contribution margin Period expenses: Manager's salary Depreciation expense Allocated administrative costs25.000 Profit center #1 income Of the foregoing, in all likelihood, Mr. Iglesias controls P350.000 P100,000 40,000 165,000 P185.000 C. P100,000 A. P165.000 В. P185.000 D. P350,000 20. The following is a summarized income statement of CoolKid Co.'s profit cente No. 44 for March: Contribution margin P70,000 Period expenses: Manager's salary Facility depreciation Corporate expense allocation Profit center income P20.000 8.000 5,000 (33,000) P37.000 Which of the following amounts is most likely subject to the control of the p center's manager? А. P70.000 C. P37,000 D. P33,000 В. P50,000
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%)-
Explain the terms break-even point and margin of safety as used in cost-volume-profit (CVP) analysis in short term decision marking. b) Kack Ltd is a company which uses cost-volume-profit analysis for planning and control decisions. You have been given the following information for the just ended operational period: Total revenue GH¢3,600,000 The annual total cost GH¢3,510,000 Variable cost GH¢2,700,000 Required: As the Management Accountant, calculate the following for the use of management in decision making for the forthcoming period: i) Variable cost/sales ratio. (1 mark) ii) Contribution/sales (C/S) ratio. iii) Break-even sales (in value). ( iv) Margin of safety (in value). (1 mark) v) Margin of safety (in percentage). vi) The sales value which would yield a profit of GH¢270,000 assuming the C/S ratio and fixed costs remain unchanged. vii)The sales value which would yield a profit of 15% of that sales assuming the C/S ratio and the fixed costs remain unchanged. viii)…
The following information is available for Sunland Department Stores: Average operating assets Controllable margin Contribution margin Minimum rate of return What is Sunland's residual income? O $59200 O. $160800 O $10800 O $670000 $740000 70000 220000 8%
genow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Lo... r Operating Leverage Teague Co. reports the following data: Sales Variable costs Contribution margin Fixed costs $480,000 264,000 $216,000 175,200 $40,800 Income from operations Determine Teague Co.'s operating leverage. Round your answer to one decimal place.
The South Division of Wiig Company reported the following data for the current year. Sales Variable costs Controllable fixed costs Average operating assets 1. 2. 3. Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. Return on Investment $2,950,000 1,947,000 Increase sales by $300,000 with no change in the contribution margin percentage. Reduce variable costs by $155,000. Reduce average operating assets by 4%. Action 1 595,000 (a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%.) Action 2 5,000,000 Action 3 (b) Using the ROI formula, compute the ROI under each of the proposed courses of action. (Round ROI to 2 decimal places, e.g. 1.57%.) Return on investment do % % % %
Chapter: Traditional performance measurement syatem & Transfer Price (Managerial Accounting) Q) Spark Ltd has two divisions, assembly and electrical. The assembly division transfers partially completed components to the electrical division at a predetermined transfer price. The assembly division’s standard variable production cost per unit is $550. This division has spare capacity, and itcould sell all its components to outside buyers at $680 per unit in a perfectly competitive market.Required:a) Determine a transfer price using the general rule.b) How would the transfer price change if the assembly division had no spare capacity? c) What transfer price would you recommend if there was no outside market for the transferred component and the assembly division had spare capacity? d) Explain how negotiation between the supplying and buying units may be used to set transfer prices. How does this relate to the general transfer pricing rule? (200 words)
Knowledge Check East Division of Blue Spruce Anchors provided the following information: Contribution margin Controllable margin Average operating assets Minimum rate of return Return on investment $890,000 $395,900 $2,140,000 Compute the return on investment and the residual income. (Round return on investment answer to two decimal places (e.g., 15.25%).) Residual income 9 % %
Compute the Revenue Effect- Growth Component, indicate if favorable/(unfavorable). *The activity driver for conversion cost is the direct labor hours. PROBLEM: Financial Perspective Gloria Corporation presents the following information for year 2020 & 2021 2020 2021 Sales P 45, 000 P 38, 000 Production Expenses Direct materials 9, 504 8, 976 12,000 Direct labor 10,000 Factory overhead Gross Profit 5, 000 P 14, 520 5, 000 P 18, 000 Operating Expenses 13,000 13, 000 Operating income P5, 000 P1, 520 During the year 2020, the corporation was able to sell 10, 000 units which is 25% above the sales in 2021. The same capacity was used for factory overhead and operating expenses for years 2020 and 2021. Other data are as follows: 2020 2021 Raw materials used ( kg) 1, 200 720 Direct labor hours 1, 000 816
Data Sales Net operating income Average operating assets Minimum required rate of return Enter a formula into each of the cells marked with a ? below Review Problem: Return on Investment (ROI) and Residual Income Compute the ROI Margin Turnover ROI Compute the residual income Average operating assets $25,000,000 $3,000,000 $10,000,000 25% Net operating income Minimum required return Residual income ? ? ? ? ? ? ?
The following data relate to Department no. 3 of Tsing Corporation: Segment contribution margin 540,000 Profit margin controllable by segment manager 310000 Segment profit margin 150000 On the basis of this information, Department no. 3's variable operating expenses are: Select one: a. $80,000. b. $160,000. c. $230,000. d. $390,000. e. not determinable.