Complete this question by entering your answers in the tabs below. Required A Required B Assume that the average margin of maintenance service firms is 3.10%, and that the average ROI for such firms is also 17%. Calculate the net income, sales, and total asset tumover that Mindspin Labs will have if the change to services is made and the firm is able to earn an average margin and achieve an 17% ROI. (Enter your "Sales" and "Net income" answers in millions (i.e., 10,000,000 should be entered as 10). Do not round intermediate calculations. Round your answers to 2 decimal places.) Show less A Net income Sales Turnover million million < Required A Required B >

Complete this question by entering your answers in the tabs below. Required A Required B Assume that the average margin of maintenance service firms is 3.10%, and that the average ROI for such firms is also 17%. Calculate the net income, sales, and total asset tumover that Mindspin Labs will have if the change to services is made and the firm is able to earn an average margin and achieve an 17% ROI. (Enter your "Sales" and "Net income" answers in millions (i.e., 10,000,000 should be entered as 10). Do not round intermediate calculations. Round your answers to 2 decimal places.) Show less A Net income Sales Turnover million million < Required A Required B >

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 13E: The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as...

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Mindspin Labs Inc. is a manufacturing firm that has experienced strong competition in its traditional business. Management is considering joining the trend to the "service economy" by eliminating its manufacturing operations and concentrating on providing specialized maintenance services to other manufacturers. Management of Mindspin Labs has had a target ROI of 16% on an asset base that has averaged $8 million. To achieve this ROI, average total asset turnover of 2 was required. If the company shifts its operations from manufacturing to providing maintenance services, it is estimated that average total assets will decrease to $5 million.Required: Calculate net income, margin, and sales required for Mindspin Labs to achieve its target ROI as a manufacturing firm. Assume that the average margin of maintenance service firms is 2.50%, and that the average ROI for such firms is also 17%. Calculate the net income, sales, and total asset turnover that Mindspin Labs will have if the change…
The corporate office is giving the managers of each channel the option of a customer relationship management system that will allow the managers to gather data about their customers and be more effective in their marketing efforts. The system will cost $930,000 and is expected to generate $168,000 in additional annual segment margin. Calculate the residual income of each distribution channel assuming it purchases the new customer relationship management system. (If the residual income is a loss then enter with a negative sign preceding the number, e.g. -5,125 or parenthesis, e.g. (5,125).) $ Retail $ Online $ Catalog Residual Income
he Pacific Division of Cullumber Industries reported the following data for the current year. Sales $4,179,930 Variable costs 2,625,000 Controllable fixed costs 825,000 Average operating assets 5,034,000 Top management is unhappy with the investment center’s return on investment. It asks the manager of the Pacific Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. 1. Increase sales by $425,000 with no change in the contribution margin percentage. 2. Reduce variable costs by $145,986. 3. Reduce average operating assets by 4% (a) Compute the return on investment for the current year. (Round answers to 1 decimal place, e.g. 52.7%.) Return on investment enter the return on investment in percentages %
Flamengo Co is a sporting goods manufacturing. Its basketball division had an ROI of 15% in 2020. Which of the following is not an advantage of ROI? O It discourages excessive investment in operating assets. O It encourages cost efficiency. O It encourages managers of departments with high ROIS to invest in average ROI projects. OIt encourages managers to pay careful attention to the relationships among sales, expenses, and investment.
Flamengo Co, a sporting goods manufacturing, decided to decentralize its operations. Which statement below is true about Flamengo after the decentralization process? O Flamengo's managers now make and implement fewer decisions than they did before the decentralization. O Flamengo's lower-level managers are responsible only for implementing decisions. O At Flamengo, overall profit margins can mask inefficiencies within various subdivisions. O At Flamengo Co., the CEO makes all the important operating and strategic decisions. O Flamengo's managers can make better decisions using local information.
The Southern Division manager of Texcaliber Inc. is growing concerned that the division will The division manager has come to Aston Melon, the divisional controller, to determine exactly for internal profit reporting and had an appropriate level of inventory at the beginning of the period. The division manager knows that he can boost profits by increasing production at the end of the period. The increased production will allocate fixed costs over a greater number of units, reducing cost of goods sold and increasing earnings. Unfortunately, it is unlikely that addi- profit objectives. Aston analyzes the data and determines that the division will need to increase inventory by 30% in order to absorb enough fixed costs to meet the division's income objective. how much additional production is needed to increase net income enough to meet the division's Chapter 7 Variable Costing for Management Analysis ke It Further TIF 7-3 Salesper Bon Jager Inc. ma TIF 7-1 Absorption costing operating…
The Southern Division manager of Texcaliber Inc. is growing concerned that the division will not be able to meet its current period income objectives. The division uses absorption costing for internal profit reporting and had an appropriate level of inventory at the beginning of the period. The division manager knows that he can boost profits by increasing production at the end of the period. The increased production will allocate fixed costs over a greater number of units, reducing cost of goods sold and increasing earnings. Unfortunately, it is unlikely that additional production will be sold, resulting in a large ending inventory balance. The division manager has come to Aston Melon, the divisional controller, to determine exactly how much additional production is needed to increase net income enough to meet the division's profit objectives. Aston analyzes the data and determines that the division will need to increase inventory by 30% in order to absorb enough fixed costs to meet…
A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round your intermediate calculations.) Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: Percentage Dollar amount Residual income $ $ Company A 480,000 156,000 21 % 18 % Company B $ 740,000 GA GA $ 53,000 $ 69 18 % 54.000 % $ $ $ Company C 520,000 155,000 % 12 % 5,000
The South Division of Wiig Company reported the following data for the current year. Sales Variable costs Controllable fixed costs Average operating assets $2,950,000 1,947,000 2. 595,000 Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. 3. 5,000,000 1. Increase sales by $300,000 with no change in the contribution margin percentage. Reduce variable costs by $155,000. Reduce average operating assets by 4%. (a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%)
Easy Removals offers a complete interstate, door-to-door solution for residential and commercial removals. As the market for removal services is very competitive, Easy Removals aims to deliver services at a low cost. Its management accountant prepared the following information - the growth, price-recovery, and productivity components that explain the change in operating income from 2020 to 2021. Growth Component Price-recovery Component Productivity Component Revenue effect $ 310,000 F $ 98,000 U - Cost effect $ 210,000 U $ 32,000 U $ 128,000 F Suppose that during 2021, the market growth rate in the industry was 10%. The number of jobs billed was 400 and 500 in 2020 and 2021, respectively. Any increase in market share more than 10%, and any change in selling price, are the result of Easy Removals’ strategic actions. Required: Compute how much of the change in operating income from 2020 to 2021 is due to the: (a) industry-market-size factor; (b)…
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