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2. The Plastics division reports the following: Sales = $500,000; Net income = $51,200; Beginning assets = $300,000; Ending assets = $340,000 What is the ROI? If the target ROI is 15%, what is the residual income?

2. The Plastics division reports the following: Sales = $500,000; Net income = $51,200; Beginning assets = $300,000; Ending assets = $340,000 What is the ROI? If the target ROI is 15%, what is the residual income?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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If the target ROI is 15%, what is the residual income?

1. The fixed budget was prepared for 5,000 units of production and shows: Sales = $110,000; Variable Costs = $45,000; Fixed Costs = $20,000 Actual Results were: Sales = $111, 800 for 5,102 units. Variable costs = $44,500. Fixed costs = 18,800. Prepare a flexible budget performance report. Be sure to indicate if the variances are favorable or unfavorable. 2. The Plastics division reports the following: Sales = $500,000; Net income = $51,200; Beginning assets = $300,000; Ending assets = $340,000 What is the ROI? If the target ROI is 15%, what is the residual income?
Transcribed Image Text:1. The fixed budget was prepared for 5,000 units of production and shows: Sales = $110,000; Variable Costs = $45,000; Fixed Costs = $20,000 Actual Results were: Sales = $111, 800 for 5,102 units. Variable costs = $44,500. Fixed costs = 18,800. Prepare a flexible budget performance report. Be sure to indicate if the variances are favorable or unfavorable. 2. The Plastics division reports the following: Sales = $500,000; Net income = $51,200; Beginning assets = $300,000; Ending assets = $340,000 What is the ROI? If the target ROI is 15%, what is the residual income?
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