47. Redding Company has two divisions with the following segment margins for the current year:Northern, s200,000; Southern, $400,000. Common expenses of the company are $50,000. Whatis Redding Company's income?OSs0.000O sG00,000S150,000$550,00048. Grey Inc. has many divisions that are evaluated on the basis of ROL. One division, Contra, makesboxes. A second division, Mantra, makes chocolates and needs 80,000 boxes per year Centraincurs the following costs for ane bax:Direct materials $0.35Direct labor$0.60Variable overhead$0.40Fixed averhead $0.13$1.48TolalCentra has capacity to make 700,000 boxes per year. Mantra currently buys ts boxes from anoutside supplier for $1.80 cach (the same price that Centra receives).Assume that Grey Inc. mandates that any transfers take place at full manufacturing cost. Whatwould be the transfer price if Contra transferred boxes to Mantra?O $1.35Cannot be determined trom the information genOS1.48$0.90$1.00

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Answered: 47. Redding Company has two divisions…

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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The following partial financial information (in thousands of dollars) is available for Thole, Incorporated: Corporate overhead costs at Thole are allocated to divisions based on relative sales. Required: a. Complete the income statements for both divisions and the corporation as a whole. Note: Enter your answers in thousands. Enter all values as positive value. Round your answers to 1 decimal place. Sales Cost of sales Gross margin Selling, General and Administrative Allocated corporate costs Operating income Tax expense (@20%) After-tax income Gross margin percentage Operating margin Profit margin Pacific 20.0 (Thousands of Dollars) Southern 40.00 % 20.00 % 16.00 % 50.00 % 36.00 % 28.80 % $ Total 100.0 984.0 48.00 % 32.80 % 26.24 %
Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last year's results: Adams Division Jefferson Division Net (after-tax) income $641,300 $378,000 Total capital employed 4,200,000 3,282,500 Washington's actual cost of capital was 12%. Required: 1. Calculate the EVA for the Adams Division. If required, enter a negative EVA as a negative number by entering your answer with the minus sign. 2. Calculate the EVA for the Jefferson Division. If required, enter a negative EVA as a negative number by entering your answer with the minus sign. 3. Conceptual Connection: Is each division creating or destroying wealth? Adams Division Jefferson Division 4. Describe generally the types of actions that Washington’s management team could take to increase Jefferson Division’s EVA? Increase the after-tax operating profit that is generated from using the same amount of invested capital. Continue…
The Casket Division of Saal Corporation had average operating assets of $1,020,000 and net operating income of $205,200 in January. The company uses residual income to evaluate the performance of its divisions, with a minimum required rate of return of 14%. Required: What was the Casket Division's residual income in January?
Buckley Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. BUCKLEY COMPANY Income Statements for Year 2 Segment A B C Sales $ 330,000 $ 480,000 $ 500,000 Cost of goods sold (242,000 ) (184,000 ) (190,000 ) Sales commissions (30,000 ) (44,000 ) (44,000 ) Contribution margin 58,000 252,000 266,000 General fixed operating expenses (allocation of president’s salary) (92,000 ) (92,000 ) (92,000 ) Advertising expense (specific to individual divisions) (6,000 ) (20,000 ) 0 Net income (loss) $ (40,000 ) $ 140,000 $ 174,000 Required Prepare a schedule of relevant sales and costs for Segment A. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Options for required A table are: Advertising…
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White has a reportable segment if the segment's revenue will total to what amount? The following information pertains to the White Company and its divisions for the year ended December 31, 2014: Sales to unaffiliated customers P10,000,000 Inter-segment sales of products similar to those sold to unaffiliated customers 2,000,000 White Company and all of its divisions are engaged solely in manufɛcturing operations. Your answer
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Glardin Outdoors is a recreational goods retailer with two divisions: Online and Stores. The two divisions both use the services of the corporate Finance and Accounting (F and A) Department. Annual costs of the F and A Department total $5.215 million a year. Managers in the two operating divisions are measured based on division operating profits. The following selected data are available for the two operating divisions: Online Stores Revenues (5000) $ 74,700 40,500 Transactions (000) 1,216.5 358.5 Required: a. What is the F and A cost that is charged to each division if divisional revenues are used as the allocation basis? b. What is the F and A cost that is charged to each division if the the number of transactions is used as the allocation basis? Complete this question by entering your answers in the tabs below. Required A Required B What is the F and A cost that is charged to each division if divisional revenues are used as the allocation basis? Note: Do not round intermediate…

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