4. Return on Investment, Residual Income & ROI PricingFor each of the following independent cases, the minimum desired Return on Investment (ROI) is 20%.Division LBMP 700,000P 42,000(5)(6)(7).(8)P 22,000SalesOperating IncomeOperating AssetsMarginTurnoverReturn on InvestmentsResidual IncomeDivision LugawP 400,000(1).(2)15%(3).30%(4).Division LugawUnit selling price: P 20Total fixed costs: P 100,000Division LBM• Unit selling price: P 700Total fixed costs: P 258,000REQUIRED:1. Compute for each division's missing items (1) to (8).2. How many more units shall be sold by Lugaw to achieve a 40% ROI?3. How much increase in selling price will allow LBM to reach 50% ROI from its current unit sales?

Return on Investments: How much an investor will make relative to the cost of their investment is…

4. Return on Investment, Residual Income & ROI Pricing For each of the following independent cases, the minimum desired Return on Investment (ROI) is 20%. Division LBM Sales Operating Income Operating Assets Margin Turnover Return on Investments Residual Income Division Lugaw P 400,000 (1). (2). 15% (3). 30% (4). P 700,000 P 42,000 (5) (6) (7). (8) P 22,000 Division Lugaw • Unit selling price: P 20 Total fixed costs: P 100,000 Division LBM Unit selling price: P 700 Total fixed costs: P 258,000 REQUIRED: 1. Compute for each division's missing items (1) to (8). 2. How many more units shall be sold by Lugaw to achieve a 40% ROI? 3. How much increase in selling price will allow LBM to reach 50% ROI from its current unit sales?

4. Return on Investment, Residual Income & ROI Pricing For each of the following independent cases, the minimum desired Return on Investment (ROI) is 20%. Division LBM Sales Operating Income Operating Assets Margin Turnover Return on Investments Residual Income Division Lugaw P 400,000 (1). (2). 15% (3). 30% (4). P 700,000 P 42,000 (5) (6) (7). (8) P 22,000 Division Lugaw • Unit selling price: P 20 Total fixed costs: P 100,000 Division LBM Unit selling price: P 700 Total fixed costs: P 258,000 REQUIRED: 1. Compute for each division's missing items (1) to (8). 2. How many more units shall be sold by Lugaw to achieve a 40% ROI? 3. How much increase in selling price will allow LBM to reach 50% ROI from its current unit sales?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 % %
Determining missing items in return on investment computation One item is omitted from each of the following computations of the return on investment: Return on Investment = Profit Margin x Investment Turnover 27 % = 10 % x (a) (b) = 16 % x 0.75 24 % = (c) x 1.5 14 % = 20 % x (d) (e) = 15 % x 1.8 Determine the missing items identified by the letters as shown above. If required, round your answers to two decimal places. (a) fill in the blank 1 (b) fill in the blank 2 % (c) fill in the blank 3 % (d) fill in the blank 4 (e) fill in the blank 5 %