The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return on invested capital is 8 percent. Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Division A Division B Division C ? $ 12,000,000 ? $510,000 $ 2,140,000 ? ? $ 2,590,000 ? 30% ? 35% 3 ? ? ? ? 30% ? ? $ 136,000

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 16E
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Use the following information for the Problems below:
The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return
on invested capital is 8 percent.
Sales reve
revenue
Income
Average investment
Sales margin
Capital turnover
ROI
Residual income
?
Division A
Division B
Division C
?
$ 12,000,000
?
$ 510,000
$ 2,140,000
?
?
$ 2,590,000
30%
?
35%
3
?
?
?
30%
?
$ 136,000
?
?
Required:
The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return on invested
capital is 8 percent.
Note: Round "Capital turnover" answers to 2 decimal places.
Division A
Division B
Division C
Sales revenue
$
40,700,000
Income
$ 1,840,000
$
8,140,000
Average investment
$
10,175,000
Sales margin
20 %
%
25 %
Capital turnover
ROI
Residual income
1.00
%
%
20 %
$
489,000
Transcribed Image Text:! Required information Use the following information for the Problems below: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return on invested capital is 8 percent. Sales reve revenue Income Average investment Sales margin Capital turnover ROI Residual income ? Division A Division B Division C ? $ 12,000,000 ? $ 510,000 $ 2,140,000 ? ? $ 2,590,000 30% ? 35% 3 ? ? ? 30% ? $ 136,000 ? ? Required: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return on invested capital is 8 percent. Note: Round "Capital turnover" answers to 2 decimal places. Division A Division B Division C Sales revenue $ 40,700,000 Income $ 1,840,000 $ 8,140,000 Average investment $ 10,175,000 Sales margin 20 % % 25 % Capital turnover ROI Residual income 1.00 % % 20 % $ 489,000
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