The Crunchy Granola Company is a diversified food company that specializes in all natural foods. The company has three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y7, are as follows:   Cereal Division Snack Cake Division Retail Bakeries Division Sales $25,900,000 $8,100,000 $9,800,000 Cost of goods sold 16,620,000 5,560,000 6,700,000 Operating expenses 7,726,000 1,973,000 2,414,000 Invested assets 10,360,000 2,025,000 6,533,333   The management of The Crunchy Granola Company is evaluating each division as a basis for planning a future expansion of operations.   Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department charges. 2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. If required, round your final answers to one decimal place. 3. If available funds permit the expansion of operations of only one division, which of the divisions would you recommend for expansion, based on parts (1) and (2)?

The vice president of operations of Scott Hall and Associates 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: Category Road Bike Division Mountain Bike Division Sales $1,750,000 $1,810,000 Cost of goods sold 1,300,000 1,440,000 Operating expenses 202,000 236,800 Invested assets 1,400,000 800,000     Prepare condensed divisional income statements for the year ended December 31, 2021, assuming that there were no service department charges.  Using the DuPont formula for return on investment, determine the profit margin percentage, investment turnover, and return on investment for each division. (Round percentages and the investment turnover to two places behind the decimal.)  If management’s minimum acceptable return on investment is 10%, determine the residual income for each division.  In your own words…

Terra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year:   Retail Division Wholesale Division Operating income $ 2,750,000 $ 6,250,000 Operating assets $ 18,500,000 $ 38,500,000 Terra Company has set a target return on investment (ROI) of 14% for both divisions. Which of the following statements is accurate? Residual income for the wholesale division was $160,000. Residual income for the wholesale division was $860,000. Residual income for the retail division was $860,000. None of these answers are correct.

The vice president of operations of Free Ride Bike Company 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: Category Road Bike Division Mountain Bike Division Sales $1,750,000 $1,810,000 Cost of goods sold Operating expenses 1,300,000 1,440,000 202,000 236,800 800,000 Invested assets 1,400,000 Instructions a. Prepare condensed divisional income statements for the year ended December 31, 2020, assuming that there were no service department charges. b. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment for each division. (Round percentages and the investment turnover to one decimal place.) c. If management's minimum acceptable return on investment is 10%, determine the residual income for each division. d. Discuss the evaluation of the two divisions, using the performance measures…

Toxaway Company is a merchandiser that segments its business into two divisions—Commercial and Residential. The company’s accounting intern was asked to prepare segmented income statements that the company’s divisional managers could use to calculate their break-even points and make decisions. She took the prior month’s companywide income statement and prepared the absorption format segmented income statement shown below:     Total Company Commercial Residential Sale 750,000 250,000 500,000 Cost of goods sold 500,000 140,000 360,000 Gross margin 250,000 110,000 140,000 Selling and administrative expresses 240,000 104,000 136,000 Net operating income 10,000 6,000 4,000   In preparing these statements, the intern determined that Toxaway’s only variable selling and administrative expense is a 10% sales commission on all sales. The company’s total fixed expenses include $72,000 of common fixed expenses that would continue to…

Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $210,600 and the following divisional results.     Division       I   II   III   IV   Sales   $245,000   $197,000   $504,000   $450,000   Cost of goods sold   200,000   192,000   301,000   249,000   Selling and administrative expenses   72,400   63,000   58,000   50,000   Income (loss) from operations   $ (27,400)   $ (58,000)   $145,000   $151,000   Analysis reveals the following percentages of variable costs in each division.     I     II     III     IV     Cost of goods sold   73 %   91 %   82 %   75 %   Selling and administrative expenses   39     59     50     61     Discontinuance of any division would save 50% of the fixed costs and expenses for that division.Top management is very concerned about the unprofitable divisions (I and II). Consensus is that one or both of the divisions should be discontinued. Prepare a…