Division A manufactures electronic circuit boards that can be sold to Division B of the same company or tooutside customers. Last year, the following activity occurred in Division A:Selling price per circuit board $ 190Variable cost per circuit board $ 119Number of circuit boards:Produced during the yearSold to outside customersSold to Division BSales to Division B were at the same price as sales to outside customers. The circuit boards purchased byDivision B were used in an electronic instrument manufactured by that division (one board perinstrument). Division B incurred $270 in additional variable cost per instrument and then sold theinstruments for $660 each.Required:Calculate the net operating incomes earned by Division A, Division B, and the company as a whole.Assume Division A's manufacturing capacity is 21,500 circuit boards. Next year, Division B wants topurchase 7,600 circuit boards from Division A rather than 6,600. (Circuit boards of this type are notavailable from outside sources.) From the standpoint of the company as a whole, should Division A sell the1,000 additional circuit boards to Division B or continue selling them to outside customers?SalesExpenses:Added by the divisionTransfer price paidTotal expensesNet operating income21,50014,9006,600Show Transcribed TextDivision A$ĆDivision B000 $Total Company00 $00

Net operating income in accounting is a measure that represents the profitability of a company's…

Answered: Sales Expenses: Added by the division…

Sales Expenses: Added by the division Transfer price paid Total expenses Net operating income Division A $ 0 Division B 0 0 $ Total Company 0 0 $ 0 0

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

Divisional Income Statements The following data were summarized from the accounting records for Ruiz Industries Inc. for the year ended November 30, 20Y8: Cost of goods sold: Support department allocations: Commercial Division $459,310 Commercial Division $62,630 Residential Division 214,350 Residential Division 37,130 Administrative expenses: Sales: Commercial Division $83,510 Commercial Division $695,920 Residential Division 76,550 Residential Division 382,760 Prepare divisional income statements for Ruiz Industries Inc. Ruiz Industries Inc. Divisional Income Statements For the Year Ended November 30, 20Y8 Commercial Division Residential Division %24
Divisional Income Statements The following data were summarized from the accounting records for Jersey Coast Construction Company for the year ended June 30, 20Y8: Cost of goods sold: Service department charges: Commercial Division $348,510 Commercial Division $47,520 Residential Division 171,510 Residential Division 29,710 Administrative expenses: Net sales: Commercial Division $63,370 Commercial Division $528,050 Residential Division 61,250 Residential Division 306,270 Prepare divisional income statements for Jersey Coast Construction Company. Jersey Coast Construction Company Divisional Income Statements For the Year Ended June 30, 20Y8 Commercial Division Residential Division Income from operations before service department charges $fill in the blank 2 $fill in the blank 3 Cost of goods sold fill in the blank 5 fill in the blank 6 Gross profit $fill in the blank 8 $fill in the blank 9 Administrative…
Question 5 Part I The following information has been extracted from the books of the Advent Corporation in respect of itstwo operating divisions:Aluminum Wire Totals$ $ $Sales Revenue 1,664,200 96,200 1,760,400Cost of goods Sold 978,520 76,470 1,054,990Gross Profit 685,680 19,730 705,410Operating Expenses 527,940 43,600 571,540Net Income 157,740 (23,870) 133,870Additionally, it is determined that in the Wire Division, 10% of the Cost of Goods Sold is Fixed and 65%of the Operating Expenses is Fixed.None of the fixed costs will be saved if the Wire Division is closed.The company hired a Consultant and they have recommended that the Wire Division be discontinued. Required: Should Advent Corporation follow the recommendation of the Consultant?
Divisional Income Statements The following data were summarized from the accounting records for Ruiz Industries Inc. for the year ended November 30, 20Y8: Cost of goods sold: Support department allocations: Commercial Division $420,760 Commercial Division $57,380 Residential Division 203,490 Residential Division 35,250 Administrative expenses: Sales: Commercial Division $76,500 Commercial Division $637,510 Residential Division 72,680 Residential Division 363,380 Prepare divisional income statements for Ruiz Industries Inc. Ruiz Industries Inc. Divisional Income Statements For the Year Ended November 30, 20Y8 Commercial Division Residential Division $ $
Profit Center Responsibility Reporting A-One Freight Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance using operating income as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31, 20Y3. Revenues—Air Division $ 1,086,300 Revenues—Rail Division 1,307,900 Revenues—Truck Division 2,315,700 Operating Expenses—Air Division 688,400 Operating Expenses—Rail Division 778,400 Operating Expenses—Truck Division 1,400,400 Corporate Expenses—Shareholder Relations 165,200 Corporate Expenses—Customer Support 546,000 Corporate Expenses—Legal 262,400 General Corporate Officers’ Salaries 364,900 The company operates three service departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Customer Support Department…
XYZ Company has two divisions, A and B. Information for each division is as follows: A B Net earnings for division P 40,000 P 260,000 Asset base for division P100,000 P1,200,000 Target rate of return 15% 18% Margin 10% 20% Weighted average cost of capital 12% 12% What is the operating asset turnover for A? 0.15 0.10 4.00 2.50 Group of answer choices 1 2 3 4
Return on investment The operating income and the amount of invested assets in each division of Conley Industries are as follows: Operating Income Invested Assets Retail Division $9,600,000 $40,000,000 Commercial Division 12,100,000 55,000,000 Internet Division 6,480,000 36,000,000 a. Compute the return on investment for each division. Division Percent Retail Division fill in the blank 1 % Commercial Division fill in the blank 2 % Internet Division fill in the blank 3 % b. Which division is the most profitable per dollar invested?
1 ) Retail Division = ( 1125 / 2500 ) x 264000 = 118800 commercial division = ( 1375 / 2500 ) x 264000 = $ 145200 Using the data for Lee Company above along with the following data, determine the divisional income from operations for the Division and the Commercial Division:
Sales revenue Variable cost of goods sold Fixed cost of goods sold Gross profit Variable operating expenses Fixed operating expenses Common fixed costs Operating income (a) $1,360,000 Q Search Baseball V V 919,000 V 123,800 317,200 183,800 85,200 65,000 ($16,800) Soccer $3,900,000 2,535,000 $ 202,200 $ 1,162,800 624,000 91,000 139,000 Basketball $2,560,000 2,065,600 178,000 316,400 Baseball 256,000 78,900 104,900 $308,800 ($123,400) Doug is concerned that two of the company's divisions are showing a loss, and he wonders if the company should stop selling baseball and basketball gear to concentrate solely on soccer gear. Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to each division (If the amount is negative then enter with a negative sign preceding the number, e.g.-5.125 or parenthesis, eg (5,125)) C $ Total $7,820,000 5,519,600 $ 504,000 F 1,796,400 1,063,800 255,100 308,900 $168,600 Soccer $ B:
Divisional income statements with support department allocations Horton Technology has two divisions. Consumer and Commercial and two corporate support departments, Tech Services and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: ACCT 102 Chapter 24 - Homework assignment take frame Teen Services Department 2770,000 292,000 Purchasing Department Other corporate administrative expenses Total expense The other corporate administrative expenses include officers' salaries and other expenses required by the corporation. The Tech Services Department allocates costs to the divisions based on the number of computers in the department, and the Purchasing Department allocates costs to the divisions based on the number of purchase orders for each department. The services used by the two divisions are as follows: Consumer Division Commercial Division Total Tech Services $1,519,500 260 410 computers 670 457,000 Purchasing 5,100 purchase orders 1,322,900…
Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $168,200 to $201,800. Variable costs and their percentage relationship to sales are sales commissions 7%, advertising 6%, travel 3%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,300, depreciation on delivery equipment $6,800, and insurance on delivery equipment $1,400. Prepare a monthly selling expense flexible budget for each $11,200 increment of sales within the relevant range for the year ending December 31, 2020. (List variable costs before fixed costs.) > > > > > $ LA FALLON COMPANY Monthly Selling Expense Flexible Budget For the Year 2020 LA tA A LA LA [
Return on investment The operating income and the amount of invested assets in each division of Conley Industries are as follows: Operating Income Invested Assets Retail Division $72,600 $330,000 Commercial Division 117,600 490,000 Internet Division 224,100 830,000 a. Compute the return on investment for each division. (Round to the nearest whole percentage.) Division Percent Retail Division % Commercial Division % Internet Division b. Which division is the most profitable per dollar invested?