Market has three divisions (Chad, Talbot, and Heather) with the following information:Talbot Heather TotalChad$60,000 $50,000 $40,000 $150,000$35.000 $28.000 $30.000 $93.000$25,000 $22,000 $10,000 $57,000$5.500 $4.500 $6.500 $16.500$19,500 $17,500 $3,500 $40,500Segment MarginLess: Common Fixed Costs$11.000 $10.500 56.000 $27.500Net Operating Income (Loss) $8.500 $7.000 ($2.500) $13.000Sales Revenue.Var.costCMLess: Direct Fixed CostNow suppose that $4,000 of the common foxed costs could be avoided if the Heather division was eliminated. Now how muchwill Market's net operating income increase or decrease if Heather is eliminated?O $500 increaseO $500 decreaseO $1.500 deceaseO $1.500 increase

Income statement is one of the financial statements that shows profitability, total revenue and…

Answered: Market has three divisions (Chad,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Spartans Inc. has three operating divisions: Alpha, Beta, and Gamma. Financial information for each division in displayed below. Alpha Beta Gamma Sales $525,000 $625,000 $475,000 Oper. Exp. $465,000 ? $437,000 Oper. Income $60,000 $75,000 ? Inv. Assets ? ? $380,000 ROI 0.2000 0.1500 ? Sales Margin ? ? 0.0800 Cap. Turn ? 1.25 ? Use the DuPont Equation to calculate the following values: Return on Investment = Net Operating Income Avg. Invested Assets…
Spartans Inc. has three operating divisions: Alpha, Beta, and Gamma. Financial information for each division in displayed below. Alpha Beta Gamma Sales $525,000 $625,000 $475,000 Oper. Exp. $465,000 ? $437,000 Oper. Income $60,000 $75,000 ? Inv. Assets ? ? $380,000 ROI 0.2000 0.1500 ? Sales Margin ? ? 0.0800 Cap. Turn ? 1.25 ? Use the DuPont Equation to calculate the following values: Return on Investment = Net Operating Income Avg. Invested Assets…
Market has three divisions (Chad, Talbot, and Heather) with the following information: Chad Talbot Heather Total $60,000 $50,000 $40,000 $150,000 $35.000 $28.000 $30.000 $93.000 $25,000 $22,000 $10,000 $57.000 $5.500 $4.500 $6.500 $16.500 Sales Revenue Var, cost CM Less: Direct Fixed Cost Segment Margin $19.500 $17,500 $3,500 $40,500 Less: Common Fixed Costs $11.000 $10.500 $6.000 $27.500 Net Operating Income (Loss) $8.500 $7.000 ($2.500) $13.000 Now suppose that $4,000 of the common foxed costs could be avoided if the Heather division was eliminated. Now how much will Market's net operating income increase or decrease if Heather is eliminated? $500 increase O $500 decrease $1.500 decrease 500 increase
Spartans Inc. has the following information for its two divisions: North and South North South Sales $6,000,000 $6,000,000 Expenses $3,800,000 $3,800,000 Oper. Income $2,200,000 $2,200,000 Taxes $660,000 $770,000 Taxable Inc. $1,540,000 $1,430,000 Invested Assets $13,000,000 $15,000,000 Spartans Inc. has a 10% hurdle rate. Calculate the following for each division: Return on Investment (ROI) North Division ________________ South…
Wayne, Inc. has four operating segments with the following information: Tables Bookcases Cabinets Chairs Sales to outsiders $ 2,600,000 $ 3,200,000 $ 5,350,000 $ 1,780,000 Intersegment transfer $ 380,000 $ 0 $ 125,000 $ 117,000 Segment expenses $ 1,900,000 $ 2,200,000 $ 4,480,000 $ 2,174,000 Segment assets $ 10,800,000 $ 12,000,000 $ 18,000,000 $ 3,500,000 Which operating segments are separately reportable under the revenue test?
Nottage Company has four separate operating segments:What revenue amount must one customer generate before it must be identified as a major customer?a. $39,600b. $42,200c. $46,500d. $49,200
Your Corporation has two divisions: A Division and B Division. The corporation's net operating income is $31,800. The A Division's divisional segment margin is S111,800 and the B Division's divisional segment margin is $152,800. What is the amount of the common fixed expense not traceable to the individual divisions? O $121,000 O $232,800 O $ 80,000 O $296,400
Banderas, Inc. has three investment centers, Red, Brown, and Black. The following data is available for each of these investment centers. BANDERAS, INC. DATA FOR INVESTMENT CENTERS OF COMPANY Red Operating Income $ A $ Brown E $ Sales Revenue B 1,000,000 Black I 1,500,000 Average Investment in Assets 300,000 500,000 J Profit Margin Ratio C 15% 10% Asset Turnover Ratio 4 F K Return on Investment (ROI) 25% G 25% Minimum Required Rate of Return 20% H L Residual Income D 50,000 30,000 REQUIRED: Using the attached answer sheets, compute the missing items A through L for Banderas, Inc. Round all percentages to two decimal places (four decimal places in all), all dollar amounts to the nearest whole dollar, and all other amounts to two decimal places.
An international company has the following profitability analysis of its three divisions: Division A Division B Division C $ 5,000,000 $ 10,000,000 $ 3,000,000 Revenues Commissions (1,000,000) (2,000,000 ) (600,000) Payments (3,000,000 ) (7,300,000 ) (2,000,000 ) Common (500,000 ) (500,000 ) (500,000 ) Costs Profit $ 500,000 $ 200,000 $ (100,000 ) The common costs are fixed, are distributed equally among the divisions, and are not avoidable if one of the divisions is dropped (they will be reallocated to the remaining divisions). What is the profitability of the remaining services if all services with losses are dropped (enter negative sign before number for loss)? Assume that at least one division has to continue if the company has to be in existence.
The Emergency Medical Services Company has two divisions that operate independently of one another. The financial data for the year 20x5 reported the following results North South $4,440,000 $3,940,000 1,110,000 910,000 920,000 645,000 6,000,000 5,000,000 Sales Operating income Taxable income Investment The company's desired rate of return is 10%. Income is defined as operating income. a. What are the respective return-on-investment ratios for the North and South divisions? Round ROI to the nearest whole percentage. ROI North South b. What are the respective residual incomes of the North and South divisions? Residual income North S South S c. Which division has the better return on investment and which division has the better residual income figure? Return on investment i # Residual income
RUSTIC RURAL Co. has the following information on its operating segments. External Inter-segment Total Segments revenues 4,800,000 revenues 2,400,000 revenues 7,200,000 Profit 2,800,000 Assets 48,000,000 A 1,600,000 400,000 2,000,000 1,600,000 28,000,000 1,000,000 1,000,000 400,000 4,000,000 800,000 800,000 320,000 3,200,000 600,000 600,000 280,000 2,800,000 E 400,000 400,000 200,000 2,000,000 F 9,200,000 2,800,000 12,000,000 5,600,000 88,000,000 Totals 21. RUSTIC Co. shall provide disclosure for major customers if revenues from transactions with single external customer amount to how much? a. 920,000 b. 280,000 c. 1,200,000 d. 560,000
Nottage Company has four separate operating segments: East West North South Sales to outsiders $188000 $126000 $65000 $43000 Inter segment transfers 16000 6000 13000 8000 What revenue amount must one customer generate before it must be identified as a major customer? Choose the correct.a. $39,600b. $42,200c. $46,500d. $49,200

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

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,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

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

SEE MORE TEXTBOOKS