Managerial Accounting
Managerial Accounting
5th Edition
ISBN: 9781259176494
Author: John J Wild, Ken Shaw Accounting Professor
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 6, Problem 16E

A recent annual report for McDonald’s reports the following operating income for its United States and Europe geographic segments:

In $ million 2013 2012
United States……… $3,779 $3,750
Europe………………… 3,371 3,196

Required

  1. Is operating income growing faster in the United States or in the Europe segment? Explain.
  2. Is the difference in operating income growth due to the use of different costing methods (absorption or variable costing) in two geographic segments? Explain.

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Ram Ltd. provides you the following figures for the year 2017. Sales (in units): Product A Product B Ist Quarter 1,250 1,600 IInd Quarter 2,950 800 IIIrd Quarter 2,700 1,000 IVth Quarter 3,100 600 Selling price per unit Rs. 24 Rs. 50 Targets for 2018:     Sales quantity increase (decrease) (20%) 25% Selling price increase (decrease) 25% (20%) Sales area X, Y and Z respectively produce 10%, 20%, 70% of Product ‘A’ sales and 70%, 20% and 10% of Product ‘B’ sales. Prepare a sales budget for 2018.
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Managerial Accounting

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