SavedAssume a company with two divisions (X and Y) prepared the following segmented income statement:YTotalSales$?$200,000$?Variable expensesContribution marginTraceable fixed expenses120,000140,000260,000?100,000৪0, 000180,000Segment margin$$(20,000)?Common fixed expenses41,200Net operating income$ 10,000What is Division X's segment margin?Multiple Choice$20,000$40,000$71,200< Prev21 of 27Next >%24

Solution: Segment margin is the margin of the segment which is based on costs directly related to…

company with two divisions (X and Y) prepared the following segmented income statement: Y Total 2$ ? $200,000 $ ? le expenses bution margin 120,000 140,000 260,000 ? ? ? ble fixed expenses t margin - fixed expenses erating income 100,000 ৪0, 000 180,000 $ $(20,000) ? 41,200 $ 10,000

company with two divisions (X and Y) prepared the following segmented income statement: Y Total 2$ ? $200,000 $ ? le expenses bution margin 120,000 140,000 260,000 ? ? ? ble fixed expenses t margin - fixed expenses erating income 100,000 ৪0, 000 180,000 $ $(20,000) ? 41,200 $ 10,000

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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Required Supply the missing information in the following table for Vernon Company. (Do not round intermediate calculations. Round "ROI" answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45).) Sales $369,600 ROI % Operating assets Operating income Turnover 2.1 Residual income Operating profit margin 14 % Desired rate of return 17 %
Assume a company with two divisions (A and B) prepared the following segmented income statement: A B Traceable fixed expenses Sales Variable expenses Contribution margin Segment margin Common fixed expenses Net operating income The dollar sales required for the company to break even is closest to: $ 300,000 $ 209,500 Total $ 509,500 120,000 180,000 140,000 260,000 69,500 249,500 100,000 80,000 180,000 $ 80,000 $ (10,500) 69,500 48,000 $ 21,500
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Assume a company with two divisions (A and B) prepared the following segmented income statement: A B Total Sales $ 300,000 $ 200,000 $ 500,000 Variable expenses 120,000 140,000 260,000 Contribution margin 180,000 60,000 240,000 Traceable fixed expenses 100,000 80,000 180,000 Segment margin $ 80,000 $ (20,000) 60,000 Common fixed expenses 50,000 Net operating income $ 10,000 The dollar sales required for the company to break even is closest to:
Spartans Inc. has three operating divisions: Alpha, Beta, and Gamma. Financial information for each division in displayed below. Alpha Beta Gamma Sales $525,000 $625,000 $475,000 Oper. Exp. $465,000 ? $437,000 Oper. Income $60,000 $75,000 ? Inv. Assets ? ? $380,000 ROI 0.2000 0.1500 ? Sales Margin ? ? 0.0800 Cap. Turn ? 1.25 ? Use the DuPont Equation to calculate the following values: Return on Investment = Net Operating Income Avg. Invested Assets…
Suresh Company reports the following segment (department) income results for the year. Department M Department N Department 0 Department P $ 82,000 $ 44,000 $ 78,000 $ 65,000 Sales Expenses Avoidable Unavoidable Total expenses Income (loss) Department Department M Department N Department O Department P Department T 17,300 45,400 57,800 21,600 75, 100 67,000 $ 6,900 $ (23,000) Decision 18,000 5,700 23,700 $ 54,300 21,500 54,300 75,800 $ (10,800) Department T $ 43,000 51,300 20,300 71, 600 $ (28,600) Total $ 312,000 a. If the company plans to eliminate departments that have sales less than avoidable costs, which department(s) would be eliminated? 153,500 159, 700 313, 200 $ (1,200)
7)
Mairy Productions has three models: D, E, and F. The following information is available Model D 100.000 $37,000 $32,000 $20.000 $12,000 Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Model E $37,000 $14,000 $23.000 $20,000 $3,000 A. Increase $13,000 OB. Decrease $13,000 OC. Increase $18,000 OD. Decrease $18,000 Model F $24,000 $14.000 $10,000 $20,000 ($10,000) Maizy Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Assuming Maizy Productions discontinues fine F and is able to double the production and sales of model E without increasing fixed costs. What effect will this have on operating income?
Sales revenue Variable expenses Contribution margin Fixed expenses Operating income Income taxes Net income $ 236,352 95,012 15,897 $11,128 $ · b. $537,356 $ 168,652 90,292 23,508 98,944 138,768 16,027 $48,081 d $667,836 453,504 59,104 $177,312
(J) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division ADivision BDivision CSales$ 12,120,000$ 28,120,000$ 20,120,000Average operating assets$ 3,030,000$ 7,030,000$ 5,030,000Net operating income$ 496,920$ 449,920$ 503,000Minimum required rate of return7.00%7.50%10.00%Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 8% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity