Dacker Products is a division of a major corporation. The following data are for the most recent year of operations:SalesNet operating incomeAverage operating assets$ 36,680,000$ 2,908,960$ 8,200,000The company's minimum required rate of returnThe division's margin used to compute ROI is closest to:Multiple Choiceо30.3%35.5%22.4%о7.9%14%

We can calculate the division's margin that is use to compute ROI using the formula for margin, we…

Answered: Dacker Products is a division of a…

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 information is available about the status and operations of the Manufacturing Division of Taylor Company, which has a hurdle rate of 6%. Divisional identifiable average assets $ 411,637 Divisional income from operations $ 18,924 Divisional sales revenue $ 368,363 1. Compute the ROI for the Manufacturing Division. 2. Break the Manufacturing Division ROI down using the Profit Margin and Investment turnover (DuPont) formula. 3. Compute the residual income for the Manufacturing Division.
Fernstrom Corporation has two divisions: East and West. Data from the most recent month appear below: Sales. Variable expenses Traceable fixed expenses Multiple Choice The company's common fixed expenses total $52,140. If the company operates at exactly the break-even sales of the East Division and West Division, what would be the company's overall net operating income? $0 East $330,000 $132,000 $140,000 ($235,140) West $144,000 $ 76,320 $ 43,000
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 %
Provide the missing data in the following table for a distributor of martial arts products: (Round "Turnover" and "ROI" answers to 1 decimal place.) Alpha Division Bravo Division Charlie Division Sales $ 276,000 Net operating income $ 38,640 $ 39,780 Average operating assets $ 459,000 Margin 7% % 13 % Turnover 4.0 Return on investment (ROI) % 28.0 % 19.5 %
Residual Income
The South Division of Wiig Company reported the following data for the current year. Sales Variable costs Controllable fixed costs Average operating assets 1. 2. 3. 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. Return on Investment $2,950,000 1,947,000 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%. Action 1 595,000 (a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%.) Action 2 5,000,000 Action 3 (b) Using the ROI formula, compute the ROI under each of the proposed courses of action. (Round ROI to 2 decimal places, e.g. 1.57%.) Return on investment do % % % %
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Profit Margin, Investment Turnover, and return on investment The condensed income statement for the Consumer Products Division of Fargo Industries Inc. is as follows (assuming no service department charges): Sales $816,000 Cost of goods sold 367,200 Gross profit $448,800 Administrative expenses 285,600 Income from operations $163,200 The manager of the Consumer Products Division is considering ways to increase the return on investment. a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $1,360,000 of assets have been invested in the Consumer Products Division. Round the investment turnover to one decimal place. Profit margin 2 x % Investment turnover Rate of return on investment % b. If expenses could be reduced by $40,800 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer…
Terra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year: Operating income Operating assets Retail Division $ 7,200,000 $37,200,000 Wholesale Division $ 3,700,000 $17,200,000 Assuming that these are the only divisions of Terra Company, what is the ROI for the company as a whole?
The South Division of Wiig Company reported the following data for the current year. Sales Variable costs Controllable fixed costs Average operating assets 1. 2 $3,000,000 1,950,000 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. 600,000 5,000,000 Increase sales by $300,000 with no change in the contribution margin percentage. Reduce variable costs by $150,000. Reduce average operating assets by 6.25%. (a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%)
nts Exercise 10-2 (Algo) Residual Income [LO10-2] Juniper Design Limited of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $420,000 on sales of $1,200,000. The company's average operating assets for the year were $1,400,000 and its minimum required rate of return was 12%.

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