Required: a. Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for the current year after the corporate costs are allocated? b. At the end of the current year, actual corporate costs incurred were $12.0 million. Of the $12.0 million, $7.4 was fixed. Actual results in the two divisions are as follows: Revenues Direct costs Operating profit before allocation Americas $ 62,100,000 49,680,000 $ 12,420,000 ROW $ 93,150,000 66,137,000 $ 27,013,000 What are the operating profits in each division for the current year after the corporate costs are allocated? Complete this question by entering your answers in the tabs below. Required A Required B Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for the current year after the corporate costs are allocated? Note: Do not round intermediate calculations. Enter your answers in thousands of dollars. Revenues Direct costs Operating profit before allocations Corporate costs Operating profit Americas ROW Total

Required: a. Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for the current year after the corporate costs are allocated? b. At the end of the current year, actual corporate costs incurred were $12.0 million. Of the $12.0 million, $7.4 was fixed. Actual results in the two divisions are as follows: Revenues Direct costs Operating profit before allocation Americas $ 62,100,000 49,680,000 $ 12,420,000 ROW $ 93,150,000 66,137,000 $ 27,013,000 What are the operating profits in each division for the current year after the corporate costs are allocated? Complete this question by entering your answers in the tabs below. Required A Required B Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for the current year after the corporate costs are allocated? Note: Do not round intermediate calculations. Enter your answers in thousands of dollars. Revenues Direct costs Operating profit before allocations Corporate costs Operating profit Americas ROW Total

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 11E: The operating income and the amount of invested assets in each division of Conley Industries are as...

See similar textbooks

Similar questions

Use the following information for Exercises 11-31 and 11-32: Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last years results: Washingtons actual cost of capital was 12%. Exercise 11-32 Residual Income Refer to the information for Washington Company above. In addition, Washington Companys top management has set a minimum acceptable rate of return equal to 8%. Required: 1. Calculate the residual income for the Adams Division. 2. Calculate the residual income for the Jefferson Division.
Service department charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of 64,560, and the Purchasing Department had expenses of 40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: A. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. B. Using the cost driver information in (A), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. C. Why does the Residential Division have a larger support department allocation than the other two divisions, even though its sales are lower?
Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $64,560, and the Purchasing Department had expenses of $40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government ContractSales $2,000,000 $3,250,000 $2,900,000 Number of employees:Weekly payroll (52 weeks per year) 400 250 150 Monthly payroll 80 30 10 Number of purchase requisitions per year 7,500 3,000 2,000 (See image for questions)
Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $64,560, and the Purchasing Department had expenses of $40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $2,000,000 $3,250,000 $2,900,000 Number of employees: Weekly payroll (52 weeks per year) 400 250 150 Monthly payroll 80 30 10 Number of purchase requisitions per year 7,500 3,000 2,000 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential…
Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $34,760, and the Purchasing Department had expenses of $15,660 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year Number of payroll checks: Weekly payroll x 52 Monthly payroll x 12 Total Residential $ 327,000 Support department allocations: Payroll Department Purchasing Department 175 32 2,300 Total Commercial $ 434,000 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the…
Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $61,284, and the Purchasing Department had expenses of $26,400 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $ 552,000 $ 731,000 $ 1,679,000 Number of employees: Weekly payroll (52 weeks per year) 245 60 65 Monthly payroll 30 41 28 Number of purchase requisitions per year 2,500 1,800 1,700 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Commercial…
The following data are available for Segment X of XYZ Company: Net income of the segment $50,000 Contribution to indirect expenses 40,000 Controllable income by manager 48,000 Assets directly used by the manager 360,000 Assets under the control of the segment 240,000 manager Determine the return on investment for evaluating 1. the income performance of the manager of Segment X and 2. the rate of income contribution of the segment. Answer:
Service Department Charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $32,536, and the Purchasing Department had expenses of $14,500 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial GovernmentContract Sales $ 303,000 $ 402,000 $ 922,000 Number of employees: Weekly payroll (52 weeks per year) 125 80 85 Monthly payroll 30 41 28 Number of purchase requisitions per year 2,100 1,500 1,400 a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential…
Service Department Charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $77,376, and the Purchasing Department had expenses of $39,530 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial GovernmentContract Sales $ 826,000 $ 1,095,000 $ 2,514,000 Number of employees: Weekly payroll (52 weeks per year) 220 60 65 Monthly payroll 36 47 34 Number of purchase requisitions per year 2,800 2,000 1,900 a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential…
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $53,344, and the Purchasing Department had expenses of $25,370 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial GovernmentContract Sales $530,000 $703,000 $1,614,000 Number of employees: Weekly payroll (52 weeks per year) 110 60 65 Monthly payroll 28 39 26 Number of purchase requisitions per year 1,800 1,300 1,200
The Custodial Division of Clark's Corporate Services (CCS) has assets of $1.2 million. During the past year, the division had profits of $228,000. CCS has a cost of capital of 7.5 percent. Ignore taxes. Required: a. Compute the divisional ROI for the Custodial Division. b. Compute the divisional RI for the Custodial Division. Complete this question by entering your answers in the tabs below. Required A Required B Compute the divisional ROI for the Custodial Division. Divisional ROI % Required A Required B >
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $63,492, and the Purchasing Department had expenses of $26,840 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial GovernmentContract Sales $561,000 $743,000 $1,707,000 Number of employees: Weekly payroll (52 weeks per year) 205 85 90 Monthly payroll 36 47 34 Number of purchase requisitions per year 2,600 1,800 1,700 a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Commercial…