Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs, and assets in their respective regions. The firm is highly decentralized and managers are evaluated solely on divisional performance. Corporate overhead (all fixed) is allocated to the regions based on regional gross margin (regional revenue minus regional cost of sales). The following information is from Lauderdale's first year of operations: Region I Region II Region III Region I $ 1,203,000 451,500 424,500 $ 703,000 633,000 1,292,000 Region II $ 1,653,000 811,500 634,500 Revenues Cost of sales Selling, General and Administrative (all fixed) Corporate overhead Information on the division assets in the three regions of Lauderdale Corporation follows: Region III $ 2,253,000 1,141,500 854,500 Required: a. Compute the division ROI for each of the three regions. b. How have these regions performed? Total Corporation $ 5,109,000 2,404,500 1,913,500 438,000
Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs, and assets in their respective regions. The firm is highly decentralized and managers are evaluated solely on divisional performance. Corporate overhead (all fixed) is allocated to the regions based on regional gross margin (regional revenue minus regional cost of sales). The following information is from Lauderdale's first year of operations: Region I Region II Region III Region I $ 1,203,000 451,500 424,500 $ 703,000 633,000 1,292,000 Region II $ 1,653,000 811,500 634,500 Revenues Cost of sales Selling, General and Administrative (all fixed) Corporate overhead Information on the division assets in the three regions of Lauderdale Corporation follows: Region III $ 2,253,000 1,141,500 854,500 Required: a. Compute the division ROI for each of the three regions. b. How have these regions performed? Total Corporation $ 5,109,000 2,404,500 1,913,500 438,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
pan.2
Transcribed Image Text:es
Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs, and
assets in their respective regions. The firm is highly decentralized and managers are evaluated solely on divisional performance.
Corporate overhead (all fixed) is allocated to the regions based on regional gross margin (regional revenue minus regional cost of
sales).
The following information is from Lauderdale's first year of operations:
Region I
Region II
Region III
$ 703,000
633,000
1,292,000
Region I
$ 1,203,000
451,500
424,500
Revenues
Cost of sales
Selling, General and
Administrative (all fixed)
Corporate overhead
Information on the division assets in the three regions of Lauderdale Corporation follows:
Required:
a. Compute the division ROI for each of the three regions.
b. How have these regions performed?
Required A Required B
Division ROI
Region II
$ 1,653,000
811,500
634,500
Complete this question by entering your answers in the tabs below.
Region I
%
Compute the division ROI for each of the three regions.
Note: Do not round intermediate calculations. Enter your answers as percentage rounded to 1 decimal place (i.e. 32.1).
Region III
$ 2,253,000
1,141,500
854,500
Region II
Required A
%
Region III
Total
Corporation
$ 5,109,000
2,404,500
1,913,500
438,000
%
Required B >
10000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education