Brutus is a division of Madam Medusa's Pawn Shop/Boutique, Inc. Last year, the division generated operating income of $609,840 and sales revenue of $10,890,000. The division had invested capital of $3,000,000. Using only the informationgiven, which of the following statements is correct?O A. For every dollar of sales revenue generated, $0.56 of income is earned.B. If the division's manager is evaluated based on maintaining the division's current Return on Investment, he would accept an investment opportunity that would yield a return of 18%.C. For every dollar of capital invested, $0.20 of income is earned.D. For every dollar of capital invested, $3.63 of income is earned.O E. If the company's hurdle rate is less than 20%, the residual income for Brutus is negative.

For every dollar of sales revenue generated, $0.056 of income is earned. ($609,840 / $3,000,000)…

Brutus is a division of Madam Medusa's Pawn Shop/Boutique, Inc. Last year, the division generated operating income of $609,840 and sales revenue of $10,890,000. The division had invested capital of $3,000,000. Using only the information given, which of the following statements is correct? O A. For every dollar of sales revenue generated, $0.56 of income is earned. O B. If the division's manager is evaluated based on maintaining the division's current Return on Investment, he would accept an investment opportunity that would yield a return of 18%. OC. For every dollar of capital invested, $0.20 of income is earned. O D. For every dollar of capital invested, $3.63 of income is earned. O E. If the company's hurdle rate is less than 20%, the residual income for Brutus is negative.

Brutus is a division of Madam Medusa's Pawn Shop/Boutique, Inc. Last year, the division generated operating income of $609,840 and sales revenue of $10,890,000. The division had invested capital of $3,000,000. Using only the information given, which of the following statements is correct? O A. For every dollar of sales revenue generated, $0.56 of income is earned. O B. If the division's manager is evaluated based on maintaining the division's current Return on Investment, he would accept an investment opportunity that would yield a return of 18%. OC. For every dollar of capital invested, $0.20 of income is earned. O D. For every dollar of capital invested, $3.63 of income is earned. O E. If the company's hurdle rate is less than 20%, the residual income for Brutus is negative.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 1CE: Forchen, Inc., provided the following information for two of its divisions for last year: Required:...

See similar textbooks

Similar questions

Gabbe Industries is a division of a major corporation. Last year the division had total sales of $33,667,200, net operating income of $4,679,741, and average operating assets of $7,014,000. The company's minimum required rate of return is 22%. Required: a. What is the division's margin? Note: Round your percentage answer to 2 decimal places. b. What is the division's turnover? Note: Round your answer to 2 decimal places. c. What is the division's return on investment (ROI)? Note: Round percentage your answer to 2 decimal places. a. Margin b. Turnover c. Return on investment
Giardin 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 $5.245 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 Required A Revenues ($000) 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? $ 75,900 41,700 Complete this question by entering your answers in the tabs below. Division Online Stores Transactions (000) 1,516.5 508.5 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…
Gabbe Industries is a division of a major corporation. Last year the division had total sales of $24,048,000, net operating income of $2,765,520, and average operating assets of $6,012,000. The company's minimum required rate of return is 17% Required: a. What is the division's margin? (Round your percentage answer to 2 decimal places.) b. What is the division's turnover? (Round your answer to 2 decimal places.) c. What is the division's return on investment (ROI)? (Round percentage your answer to 2 decimal places.) a. Margin b. Turnover c. Return on investment 96
Gabbe Industries is a division of a major corporation. Last year the division had total sales of $27,311,900, net operating income of $2,840,438, and average operating assets of $7,094,000. The company's minimum required rate of return is 15%. Required: a. What is the division's margin? (Round your percentage answer to 2 decimal places.) b. What is the division's turnover? (Round your answer to 2 decimal places.) c. What is the division's return on investment (ROI)? (Round percentage your answer to 2 decimal places.)
Visions designs, markets, and distributes audio and gaming headphones, earbuds, and speakers. Assume that last year, Visions reported cost of goods sold of $157 million. Assume that this year, cost of goods sold was $116 million. Accounts payable was $23 million at the end of last year and $17 million at the end of this year. Required: 1. For this year, compute the average number of days that Visions's accounts payable are outstanding. Note: Do not round intermediate calculations and round your final answer to the nearest whole number. Use 365 days a year. Average number of days
Office Today is an office supply store. Office Today’s revenue in the current year is $800 millionand its cost of goods sold is $640 million. Compute Office Today’s gross profit and its gross profitpercentage.
Ceder Products is a division of a major corporation. Last year the division had total sales of $21.520,000, net operating income of $538,000, and average operating assets of $8,000,000. The company's minimum required rate of return is 18%. 6. The division's margin is closest to: A. 2.5% B. 39.7% C. 6.7% D. 37.2%
During the current year, Sokowski Manufacturing earned income of $206,500 from total sales of $3,500,000 and average capital assets of $10,000,000. A. Based on this information, calculate asset turnover. If required, round your answer to two decimal places. B. Assume sales margin is 5.9%, what is the total ROI for the company during the current year?. If required, round your answer to one decimal place.
Accordingly, 15% of rent, depreciation, and utility expenses pertain to the sales office while the rest pertains to the corporate office. Questions: How much is the net sales for the year? How much is the cost of sales for the year? How much is the gross profit for the year? How much is the net income for the year? Prepare a statement of comprehensive income. Prepare a financial statement.
Burdeno Appliances has two divisions, Sales and Financing. Sales is responsible for selling Burdeno's inventory and maintaining inventory for future sale. Financing Division takes loan applications, packages loans into pools, and sells them in the financial markets. It also services the loans. Both divisions meet the requirements for segment disclosures under accounting rules. Sales Division had $8 million in sales last year. Costs, other than those charged by Financing Division, totaled $6 million. Financing Division earned revenues of $2.5 million from servicing loans and incurred outside costs of $3 million. In addition, Financing charged Operations $900,000 for loan-related fees. Sales' manager complained to corporate that Financing was charging 150 percent of the commercial rate for loan-related fees and that Sales would be better off sending its buyers to an outside lender Financing's manager replied that although commercial rates could be lower, servicing these loans is more…
Burdeno Appliances has two divisions, Sales and Financing. Sales is responsible for selling Burdeno's inventory and maintaining inventory for future sale. Financing Division takes loan applications, packages loans into pools, and sells them in the financial markets. It also services the loans. Both divisions meet the requirements for segment disclosures under accounting rules. Sales Division had $9 million in sales last year. Costs, other than those charged by Financing Division, totaled $7 million. Financing Division earned revenues of $2.6 million from servicing loans and incurred outside costs of $3.1 million. In addition, Financing charged Operations $900,000 for loan-related fees. Sales' manager complained to corporate that Financing was charging 150 percent of the commercial rate for loan-related fees and that Sales would be better off sending its buyers to an outside lender. Financing's manager replied that although commercial rates could be lower, servicing these loans more…
During the current year, Sokowski Manufacturing earned income of $292,400 from total sales of $4,300,000 and average capital assets of $10,000,000. A. Based on this information, calculate asset turnover. If required, round your answer to two decimal places. fill in the blank times B. Assume sales margin is 6.8%, what is the total ROI for the company during the current year?. If required, round your answer to one decimal place. fill in the blank %