Managerial Accounting
17th Edition
ISBN: 9781260247787
Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Publisher: RENT MCG
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Question
Chapter 11, Problem 16E
1.
To determine
:
The return on investment (ROI) of the company.
2.
To determine
Return on Investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.
:
The new return on investment (ROI) of the company, if sales will increase by 50% and net operating income will increase by 200%, and there is no increase in average operating assets.
3.
To determine
Return on Investment establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.
:
The new return on investment (ROI) of the company, if sales are increased by $1,000,000, average operating assets are increased by $250,000, and net operating income is increased by $200,000.
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rt
For its three ivestment centers, Gerrard Company
accumulates the following data:
II
$1,900,000 $4075,000 $4,069,00
Sales
Controllable margin
1,330,000 2,037,500 3,662,10
Average operating assets 5,068,000 7,993,000 12,028,00
The centers expect the following changes in the next year: (I)
increase sales 14%; (II) decrease costs $376,000; (III)
decrease average operating assets $491,000.
Compute the expected return on investment (ROI) for each
center. Assume center I has a controllable margin percentage
of 70%. (Round ROI to 1 decimal place, e.g. 1.5%.)
The expected return on investment
Question 3
You have been presented with the following information :
Customer Perspective
Actual Performance
$6.5 mil
Targets
a. Total Sales
$ 10 mil
b. No. of Stock Returns
10
20
Internal Business Perspective
a. Maintenance Costs
b. No of Workers (production)
Targets
$200k
Actual Performance
$50k
30
15
Financial Perspective
Actual Performance
Targets
$4mil
a. Net Profit
$1mil
b. Asset Turnover ratio
15 times
20 times
Innovation & Growth Perspective
Targets
$100k
Actual Performance
$20k
a. Training Costs
b. No of Staff (Marketing)
20
12
Other information obtained are customers are frequently complaining and cancelling orders and
machines breakdowns.
Required :
i) Comment on the performance.
ii) Propose suggestion to improve.
Exercise 11-9 (Algo) Return on Investment (ROI) and Residual Income Relations [LO11-1, LO11-2]
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
$ 163,000
17%
15 %
+
$
$
$
Company
B
760,000
40,000
16 %
59,000
%
$
$
$
C
540,000
153,000
%
15 %
7,000
Chapter 11 Solutions
Managerial Accounting
Ch. 11 - Prob. 1QCh. 11 - Prob. 2QCh. 11 - Prob. 3QCh. 11 - Prob. 4QCh. 11 - Prob. 5QCh. 11 - Prob. 6QCh. 11 - Prob. 7QCh. 11 - Prob. 8QCh. 11 - Prob. 9QCh. 11 - Prob. 10Q
Ch. 11 - Prob. 1AECh. 11 - Prob. 2AECh. 11 - Prob. 1F15Ch. 11 - Prob. 2F15Ch. 11 - Prob. 3F15Ch. 11 - Prob. 4F15Ch. 11 - Prob. 5F15Ch. 11 - Prob. 6F15Ch. 11 - Prob. 7F15Ch. 11 - Prob. 8F15Ch. 11 - Prob. 9F15Ch. 11 - Prob. 10F15Ch. 11 - Prob. 11F15Ch. 11 - (
$1,000,000
300,000
700,000
500.000
$
200,000
...Ch. 11 - Prob. 13F15Ch. 11 - Prob. 14F15Ch. 11 - Prob. 15F15Ch. 11 - Prob. 1ECh. 11 - Prob. 2ECh. 11 - Prob. 3ECh. 11 - Prob. 4ECh. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 -
EXERCISE 11-9 Return on Investment (ROI) and...Ch. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prob. 13ECh. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Prob. 17PCh. 11 - Prob. 18PCh. 11 - Prob. 19PCh. 11 - Prob. 20PCh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Prob. 23PCh. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Prob. 26C
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