Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow Sales Net operating Income Average operating assets Required 11 Required 2 Required: 1. For each division, compute the return on investment (ROI). 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 15%. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. ROI Division Osaka $ 10,800,000 $648,000. Osaka Yokohama $ 38,000,000 $3,040,000 $3,600,000 $ 19,000,000 For each division, compute the return on investment (ROI). Yokohama % Required 2 >

Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow Sales Net operating Income Average operating assets Required 11 Required 2 Required: 1. For each division, compute the return on investment (ROI). 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 15%. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. ROI Division Osaka $ 10,800,000 $648,000. Osaka Yokohama $ 38,000,000 $3,040,000 $3,600,000 $ 19,000,000 For each division, compute the return on investment (ROI). Yokohama % Required 2 >

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: Sales Average operating assets Net operating income Property, plant, and equipment (net) Required 1 Required 2 Required: 1. Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover. 2. Which divisional manager seems to be doing the better job? Complete this question by entering your answers in the tabs below. Queensland division New South Wales division Queensland $ 1,984,000 $ 620,000 $ 148,800 $ 262,000 Margin Division Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover. (Do not round intermediate calculations. Round your answers to 2 decimal places.) % % Turnover New South Wales $ 2,907,000 $570,000 $ 145, 350 $ 212,000
Comparison of Performance Using Return on Investment (ROI) Comparative data on three companies in the same service industry are given below: Required: 1. What advantages are there to breaking down the ROI computation into two separate elements, margin and turnover? 2. Fill in the missing information above, and comment on the relative performance of the three companies in as much detail as the data permit. Make
The following information is available about the status and operations of the Manufacturing Division of Taylor Company, which has a hurdle rate of 6%. Divisional identifiable average assets $ 411,637 Divisional income from operations $ 18,924 Divisional sales revenue $ 368,363 1. Compute the ROI for the Manufacturing Division. 2. Break the Manufacturing Division ROI down using the Profit Margin and Investment turnover (DuPont) formula. 3. Compute the residual income for the Manufacturing Division.
Using the following data for Ace Guitar Company: A Region Sales Cost of goods sold Selling expenses Support department expenses: Purchasing Payroll accounting $781,000 296,800 187,400 A Region Operating Income B Region Operating Income B Region $639,000 242,800 153,400 $238,600 159,000 Allocate support department expenses proportional to the sales of each region. Determine the divisional operating income for the A and B regions.
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A. Compute the divisional ROI for the Campus Division. B. Compute the divisional RI for the Campus Division.
ROI is effective because it takes into consideration the three factors under the control of an investment center manager: revenues, costs, and investments. ROI measures the income (or return) earned on each dollar of investment. APPLY THE CONCEPTS: Calculating return on investment The divisional income statements for three divisions of the McLaren Company are shown. McLaren Company Divisional Income Statements For the Year Ending December 31, 2012 Division A Division B Division C Sales Revenue $1,947,000 $1,197,000 $594,000 Operating expenses (1,148,730) (897,750) (314,820) Operating income before service department charges $798,270 $299,250 $279,180 Service department charges (467,280) (177,156) (166,320) Operating income $330,990 $122,094 $112,860 Additional financial data from the three divisions of the McLaren Company are shown. Division A Division B Division C Invested assets $1,100,000 $665,000 $450,000 Calculate the return on investment for each division. If required, round the…
Conner Manufacturing has two major divisions. Management wants to compare their relative performance. Information related to the two divisions is as follows: Division 1: Sales: Expenses: Asset investment: $200,000 $150,000 $1,000,000 Division 2: Sales: $45,000 Expenses: $35,000 Asset investment: $200,000 Conner currently requires investments to meet a rate of return on asset investment of 5%. Which division has the greatest level of "residual income"? Select one: O a. Division 1 O b. Division 2 O c. Both divisions have the same return on investment ratio
Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Compute the company's margin, turnover, and return on investment (ROI) for the period. Note: Round your intermediate calculations and final answer to 2 decimal places. Margin % Turnover ROI %
The following partial financial information (in thousands of dollars) is available for Thole, Incorporated: Corporate overhead costs at Thole are allocated to divisions based on relative sales. Required: a. Complete the income statements for both divisions and the corporation as a whole. Note: Enter your answers in thousands. Enter all values as positive value. Round your answers to 1 decimal place. Sales Cost of sales Gross margin Selling, General and Administrative Allocated corporate costs Operating income Tax expense (@20%) After-tax income Gross margin percentage Operating margin Profit margin Pacific 20.0 (Thousands of Dollars) Southern 40.00 % 20.00 % 16.00 % 50.00 % 36.00 % 28.80 % $ Total 100.0 984.0 48.00 % 32.80 % 26.24 %
Meiji Isetan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 9,600,000 $ 26,000,000 Net operating income $ 672,000 $ 2,340,000 Average operating assets $ 3,200,000 $ 13,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 16%. Compute the residual income for each division. 3. Is Yokohama’s greater amount of residual income an indication that it is better managed?