Manford Inc. has two divisions-Refrigerators and Dish Washer. Manford Company Segmented Income Statements For the Current Fiscal Year Ended December 31 Refrigerator Dish Washer Division Division Sales $10,000,000 $5,400,000 Cost of goods sold $4,200,000 $2,660,000 Gross margin $5,800,000 $2,740,000 Allocated overhead (from corporate) $940,000 $740,000 Selling and administrative expenses $780,000 $360,000 Operating income Income tax expense (45%) Net income $4,080,000 $1,640,000 $1,836,000 $738,000 $2,244,000 $902,000 Assume the Dish Washer Division has average operating assets totaling $6,560,000 for the year and the company's cost of capital rate is 15 percent. What is the residual income for the Dish Washer division?

Manford Inc. has two divisions-Refrigerators and Dish Washer. Manford Company Segmented Income Statements For the Current Fiscal Year Ended December 31 Refrigerator Dish Washer Division Division Sales $10,000,000 $5,400,000 Cost of goods sold $4,200,000 $2,660,000 Gross margin $5,800,000 $2,740,000 Allocated overhead (from corporate) $940,000 $740,000 Selling and administrative expenses $780,000 $360,000 Operating income Income tax expense (45%) Net income $4,080,000 $1,640,000 $1,836,000 $738,000 $2,244,000 $902,000 Assume the Dish Washer Division has average operating assets totaling $6,560,000 for the year and the company's cost of capital rate is 15 percent. What is the residual income for the Dish Washer division?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
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Garcia Company has two operating departments (Phone and Earbuds) and one service department (Office). Its departmental income statements follow. Indirect expenses and service department expenses consist of rent, utilities, and office department expenses. GARCIA COMPANY Departmental Income Statements For Year Ended December 31 Sales Cost of goods sold Gross profit Expenses Sales salaries Supplies used Depreciation-Equipment Rent Utilities Share of office department expenses Total expenses Income Phone Earbuds Combined $ 200,000 98,000 $ 95,000 $ 295,000 58,900 102,000 36,100 156,900 138,100 20,000 8,700 28,700 1,150 450 1,600 2,100 300 2,400 7,060 3,840 10,900 2,700 1,800 4,500 10,500 4,500 43,510 19,590 $ 58,490 $ 16,510 15,000 63,100 $ 75,000 Required: Prepare a departmental contribution to overhead report. Garcia Company Departmental Contribution to Overhead For Year Ended December 31 Gross profit Direct expenses Phone Earbuds Combined 0 0 0 Total direct expenses 0 0 0 Departmental…
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Subject: accounting
Income from Operations for Profit Center The centralized computer technology department of Hardy Company has expenses of $320,000. The department has provided a total of 4,000 hours of service for the period. The Retail Division has used 2,750 hours of computer technology service during the period, and the Commercial Division has used 1,250 hours of computer technology service. Additional data for the two divisions is following below: Retail Division Commercial Division Sales $2,150,000 $1,200,000 Cost of goods sold 1,300,000 800,000 Selling expenses 150,000 175,000 Determine the divisional income from operations for the Retail Division and the Commercial Division. Do not round interim calculations. Hardy Company Divisional Income from Operations Retail Division Commercial Division $fill in the blank 2 $fill in the blank 3 fill in the blank 5 fill in the blank 6 $fill in the blank 8 $fill in the blank 9 fill in the blank 11 fill in the…
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