Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs, andassets 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 ofsales).The following information is from Lauderdale's first year of operations:RevenuesCost of salesSelling, General and Administrative (allfixed)Corporate overheadRequired:Region I$ 1,203,000451,500424,500Region II$ 1,653,000811,500634,500Region III$ 2,253,0001,141,500854,500TotalCorporation$ 5,109,0002,404,5001,913,500438,000a. Compute divisional operating income for the three regions. Ignore taxes.b. How have these regions performed?Complete this question by entering your answers in the tabs below.Required ARequired BCompute divisional operating income for the three regions. Ignore taxes.Note: Do not round the "Overhead rate" value. Round your final answers to the nearest whole dollar amount.Divisional incomeRegion IRegion IIRegion III

Requirement ARegion IRegion IIRegion IIITotalRevenues$…

Answered: Lauderdale Corporation is organized in…

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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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 Total Corporation Revenues $ 1,200,000 $ 1,650,000 $ 2,250,000 $ 5,100,000 Cost of sales 450,000 810,000 1,140,000 2,400,000 Selling, General and Administrative (all fixed) 420,000 630,000 850,000 1,900,000 Corporate overhead 432,000 Information on the division assets in the three regions of Lauderdale Corporation follows: Region I $ 700,000 Region II 630,000 Region III 1,287,500 Lauderdale Corporation has a cost of capital of 8.6 percent. Required: Compute…
Consolidated Industries is a diversified manufacturer with business units organized as divisions, including the Reigis Steel Division. Consolidated monitors its divisions on the basis of both unit contribution and return on investment (ROI), with investment defined as average operating assets employed. All investments in operating assets are expected to earn a minimum return of 11% before income taxes. Reigis’s cost of goods sold is considered to be entirely variable; however, its administrative expenses do not depend on volume. Selling expenses are a mixed cost with one-third attributed to sales volume. The 2022 operating statement for Reigis follows. The division’s operating assets employed were $181,250,000 at November 30, 2022, unchanged from the year before. REIGIS STEEL DIVISION Operating Statement For the Year Ended November 30, 2022 (000s omitted) Sales revenue $ 96,000 Less expenses: Cost of goods sold $ 50,250 Administrative expenses 10,000…
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The Josh - Lester Corporation, manufacturer of tractors and other heavy farm equipment, is organized along decentralized product lines, with each manufacturing division operating as a separate profit center. Each division manager has been delegated full authority on all decisions involving the sale of that division's output both to outsiders and to other divisions of Josh - Lester. i(Click the icon to view the information on the divisions.) Begin by calculating the contribution margin from selling units to other customers. Then calculate the net benefit (cost) to the company as a whole. (Enter a net cost using parentheses or a minus sign.) Less: The company already completed an analysis to determine if it was in its best interest to have division C purchase 1,300 units from an external supplier for $125 per unit, assuming that there are no alternative uses for internal facilities of division A. (Click the icon to view the results of the analysis.) Now, assume that division A can sell…
am.101.
Delisa Corporation has two divisions: Division L and Division Q. Data from the most recent month appear below: Total Company Division L Division Q Sales $490,000 $125,000 $365,000 Variable expenses 288,800 62,500 226,300 Contribution margin 201,200 62,500 138,700 Traceable fixed expenses 111,650 34,790 76,860 Segment margin 89,550 $ 27,710 $ 61,840 Common fixed expenses 36,910 Net operating income $ 52,640 The break-even in sales dollars for Division Q is closest to:
Giardin Outdoors is a recreational goods retaller with two divisions: Online and Stores. The two divisions both use the services of the corporate Finance and Accounting (F and A) Department. Annual costs of the F and A Department total $5.2 million a year. Managers In the two operating divisions are measured based on division operating profits. The following selected data are available for the two operating divisions: Revenues (5000) $ 74,100 39,900 Online Stores Required: Determine the cost allocation if $3.8 million of the F and A costs are fixed and allocated on the basis of revenues, and the remaining costs, which are variable, are allocated on the basis of transactions. Note: Do not round Intermediate calculations. Enter your answers in dollars, not in millions or thousands. Fixed Variable Total $ Transactions (000) 1,066.5 283.5 Online $ Stores
Question list Question 1 Question 2 O Question 3 O Question 4 O Question 5 O Question 6 O Question 7 O Question 8 Help me solve this K Lipsky Ice Road Trucking reported the following partial list of accounts at May 31: (Click the icon to view the partial list of accounts.) Prepare Lipsky Ice Road Trucking's closing entries for the partial list of accounts. Include explanations. Record the closing entry for revenue. (Record debits first, then credits. Select an explanation on the last line of the journal entry. Leave unused cells blank.) Debit Date Calculator Ask my instructor Accounts Credit Clear all Check answer
Birrell Scientific Inc. manufactures electronic products, with two operating divisions, the GPS Systems and Communication Systems divisions. Condensed divisional income statements, which involve no intracompany transfers and which include a breakdown of expenses into variable and fixed components, are as follows: Birrell Scientific Inc.Divisional Income StatementsFor the Year Ended December 31, 20Y5 GPS SystemsDivision CommunicationSystems Division Total Sales: 75,000 units @ $60 per unit $4,500,000 $4,500,000 150,000 units @ $115 per unit $17,250,000 17,250,000 $4,500,000 $17,250,000 $21,750,000 Expenses: Variable: 75,000 units @ $40 per unit $(3,000,000) $(3,000,000) 150,000 units @ $90 per unit* $(13,500,000) (13,500,000) Fixed 250,000 (600,000) (850,000) Total expenses $(3,250,000) $(14,100,000)…
Divisional Performance Analysis and Evaluation The vice president of operations of Free Ride Bike Company is evaluating the performance of two divisions organized as investment centers. Invested assets and condensed income statement data for the past year for each division are as follows: Mountain Bike Division Road Bike Division Sales Cost of goods sold Operating expenses Invested assets Required: 1. Prepare condensed divisional income statements for the year ended December 31, 20Y7, assuming that there were no support department allocations. Free Ride Bike Company Divisional Income Statements For the Year Ended December 31, 20Y7 Sales Cost of goods sold Gross profit Operating expenses Operating income $ Road Bike Division Road Bike Division $3,410,000 1,500,000 1,330,300 3,100,000 $ Road Bike Division Mountain Bike Division 2. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and rate of return on investment for each division. If…
Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Sales Net operating income Average operating assets Division Osaka $ 10,100,000 $ 808,000 $ 2,525,000 Yokohama $ 31,000,000 $ 3,100,000 $ 15,500,000 Required: 1. For each division, compute the return on investment (ROI). 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 17%. Compute the residual income for each division.
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