Empire Records divides its operations into three divisions. The company CEO noticed that its North American division is underperforming and is trying to decide if this division should be eliminated. A recent income statement for its North American division is asfollows:Empire RecordsNorth American DivisionIncome StatementRevenueDivisions sales commissionsSalary of the division presidentLease cost for division retail storesAllocation of company-wide legal cost*Net loss*This cost relates to a legal settlement paid by Empire Records during the year.Required:a. Prepare an income statement containing only the relevant information to the segment elimination decision.b. Based on the income statement you prepared in Requirement a, should this division be eliminated?Complete this question by entering your answers in the tabs below.Required A Required B$570,000(353,000)(25,700)(119,000)(77,000)(4,700)Prepare an income statement containing only the relevant information to the segment elimination decision.EMPIRE RECORDSNorth American DivisionIncome StatementRequired ARequired B >

To decide if a division must continue or be eliminated, the relevant cost and revenue must be…

g and is trying to decide if this division should be eli Empire Records North American Division Income Statement ons sales commissions of the division president cost for division retail stores ion of company-wide legal cost* S $570, E (353,06 (25,76 (119,06 (77,06 (4,76 relates to a legal settlement paid by Empire Record

g and is trying to decide if this division should be eli Empire Records North American Division Income Statement ons sales commissions of the division president cost for division retail stores ion of company-wide legal cost* S $570, E (353,06 (25,76 (119,06 (77,06 (4,76 relates to a legal settlement paid by Empire Record

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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Subject: acounting
Transfer Pricing Exoplex Industries Inc. is a diversified aerospace company, including two operating divisions, Semiconductors and Navigational Systems. Condensed divisional income statements, which involve no intracompany transfers and include a breakdown of expenses into variable and fixed components, are as follows: Exoplex Industries Inc.Divisional Income StatementsFor the Year Ended December 31, 20Y8 SemiconductorsDivision NavigationalSystemsDivision Total Sales: 2,240 units × $396 per unit $887,040 $887,040 3,675 units × $590 per unit $2,168,250 2,168,250 Total sales $887,040 $2,168,250 $3,055,290 Expenses: Variable: 2,240 units × $232 per unit $519,680 $519,680 3,675 units × $472* per unit $1,734,600 1,734,600 Fixed 220,000 325,000 545,000 Total expenses $739,680 $2,059,600 $2,799,280 Income from operations $147,360 $108,650 $256,010…
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 Bravp Division Charlie Division Sales $272,000 Net Operating Income $27,200 $38,800 Average opertaing assets $404,000 Margain 5% 9% Turnover 4.0 ROI 20.0% 13.5%
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1 ) Retail Division = ( 1125 / 2500 ) x 264000 = 118800 commercial division = ( 1375 / 2500 ) x 264000 = $ 145200 Using the data for Lee Company above along with the following data, determine the divisional income from operations for the Division and the Commercial Division:
Provide the missing data in the following table for a distributor of martial arts products: Note: Enter "Turnover" and "ROI" answers to 1 decimal place. Sales Net operating income Average operating assets Margin Turnover Return on investment (ROI) Alpha $ 419,000 7% 4.0 % $ $ Division Bravo 256,000 35,840 % 28.0 % Charlie $ 49,335 13 % 19.5 %
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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