Crane Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Eachdistribution channel is evaluated as an investment center. Selected results from the latest year are as follows:Retail StoresInternetCatalog SalesSales revenue$10,130,000$4,080,000$3,400,000Variable expenses4,080,0001,630,0001,930,000Direct fixed expenses4,580,0001.130.0001,330,000Average assets8,080,0004,080,0001,600,000Required rate of return10%10%10%(a)Your answer is incorrect.Calculate the current residual income for each distribution channel. (If the residual income is a loss then enter with a negative signpreceding the number, e.g. -5,125 or parenthesis, e.g. (5,125).)Residual Income$Retail$Online$Catalog

Step 1: Calculate the Net Operating Income (NOI)Net Operating Income is calculated as…

Answered: Crane Decor sells home decor items…

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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A business has 2 grocery stores. Each grocery store is considered an investment center. Here are their performance statistics for February: Grocery Store Sales Net Income Average Invested Assets Alberta $100,000 $60,000 $500,000 San Andreas $150,000 $75,000 $600,000 Our company's target income level is 10% of average invested assets. What is the residual income for our Alberta store? *Round to dollars
Blossom Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Sales revenue Variable expenses Direct fixed expenses Average assets Required rate of return (a) Retail Online Catalog $ $ Retail Stores Internet $ $10,120,000 4,070,000 4,570,000 8,070,000 12% $4,070,000 Residual Income. 1,620,000 1,120,000 4,070,000 12% Calculate the current residual income for each distribution channel. (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).) Catalog Sales $3,400,000 1,920,000 1,320,000 1,610,000 12%
The following operating information reports the results of Ayayai Company’s production and sale of 12,500 air-conditioned motorcycle helmets last year. Based on early market forecasts, Ayayai expects the same results this year. Sales $2,026,000 Variable manufacturing expenses 862,000 Fixed manufacturing expenses 279,000 Variable selling and administrative expenses 112,000 Fixed selling and administrative expenses 229,000 The American Motorcycle Club has offered to purchase 1,600 helmets at a price of $100 each. Ayayai has sufficient idle capacity to fill the order, which would not affect the company’s cost structure or regular sales.If Ayayai accepts this order, by how much will its income increase or decrease? Operating income will select an option decreaseincrease by $enter a dollar amount .
Caldwell Supply, a wholesaler, has determined that its operations have three primary activities: purchasing, warehousing, and distributing. The firm reports the following operating data for the year just completed: Activity Purchasing Warehousing Distributing Cost Driver Number of purchase orders Number of moves Number of shipments. Quantity of Cost Driver 1,040 8,400 540 Maximum cost Cost per Unit of Cost Driver $154 per order 34 per move 84 per shipment Caldwell buys 100,400 units at an average unit cost of $14 and sells them at an average unit price of $24. The firm also has fixed operating costs of $250,400 for the year. Caldwell's customers are demanding a 14% discount for the coming year. The company expects to sell the same amount if the demand for price reduction can be met. Caldwell's suppliers, however, are willing to give only a 8% discount. Required: Caldwell has estimated that it can reduce the number of purchase orders to 720 and can decrease the cost of each shipment by…
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Caldwell Supply, a wholesaler, has determined that its operations have three primary activities: purchasing, warehousing, and distributing. The firm reports the following operating data for the year just completed: Cost Driver Number of purchase orders Number of moves Distributing Number of shipments Activity Purchasing Warehousing Quantity of Cost Driver 1,200 8,900 700 Cost per Unit of Cost Driver $170 per order 39 per move 100 per shipment Caldwell buys 102,000 units at an average unit cost of $19 and sells them at an average unit price of $29. The firm also has fixed operating costs of $252,000 for the year. Maximum cost Caldwell's customers are demanding a 19% discount for the coming year. The company expects to sell the same amount if the demand for price reduction can be met. Caldwell's suppliers, however, are willing to give only a 13% discount. Required: Caldwell has estimated that it can reduce the number of purchase orders to 880 and can decrease the cost of each shipment by…
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