The following data relate to the Motor Division of Young Company: Sales P10,000,000 Variable costs 3,000,000 Direct fixed costs 5,000,000 Invested capital 8,000,000 Allocated actual interest costs 800,000 Capital charge 12% Question: What is the divisional return on investment?

The following data relate to the Motor Division of Young Company: Sales P10,000,000 Variable costs 3,000,000 Direct fixed costs 5,000,000 Invested capital 8,000,000 Allocated actual interest costs 800,000 Capital charge 12% Question: What is the divisional return on investment?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: erage operating assets mimum rate of return Your answer is correct. North Division Compute the…

A: Residual income :— It is the difference between controllable margin and minimum desired return on…

Q: ales P 10,000,000 Average invested capital…

A: Solution: Return on investment is a ratio that represent the profitability of a division based on…

Q: Find transfer price for the division A. Desired return on investment 28% Fixed assets=500,000…

A: Transfer pricing was used by the division of an entity to fix its price for transferring their…

Q: Presented below is information related to the Hokie Division of Lumber, Inc. Contribution margin…

A: Return on Investment: It is a measure of management effectiveness in utilizing assets at its…

Q: A company's divislon has sales of $6,000,000, Income of $240,000, and average assets of $4,800.000.…

A: Financial ratios are used to check different aspects of a company - liquidity, solvency, etc. They…

Q: Data for the Deluxe Division of Blossom Industries which is operated as an investment center is as…

A: A contribution margin measures how profitable a product is to produce. A company's contribution…

Q: Compute the residual income for each division. North Division West Division South Division SA $…

A: RETURN ON INVESTMENTReturn on investment is one of the profitability ratios which shows how much…

Q: Required information Use the following information for the Problems below: The following data…

A: Ratio analysis s helps to analyze the financial statements of the company. Management can make…

Q: Division A $ 12,280,000 $ 3,070,000 $ 601,720 10.00% Division B $35,350,000 $ 7,070,000 $ 600,950…

A: Return on investment (ROI) is a performance statistic used to evaluate the efficiency or…

Q: Using the following data, estimate the new Return on Investment if there is a 8% increase in sales -…

A: Return on investment is often calculated by dividing the controllable margin by either average…

Q: Eacher Wares is a division of a major corporation. The following data are for the latest year of…

A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…

Q: Using the following data, estin 8% decrease in the average of operating assets as the base. Sales…

A: Net income is the income generated from an investment after deducting all the expenses, including…

Q: 16. The following data relate to the White Division of Colgate Company: P 10,000,000 3.000.000 Sales…

A: Formulas: Return on investment percentage = Net Operating income / Average Invested Capital where,…

Q: Using the following data, estimate the new Return on Investment if there is a 11% increase in sales…

A: There has been an increase of 11% in sales. So new sales will be $3,838,419+11%=$4,260,645.09…

Q: The following data are available for two divisions of Solomons Company. North Division South…

A: Answer 1) ROI = Operating profit / investmentsNorth Devision = (10,515,000/49,000,000) x 100 =…

Q: Presented here is information related to the Southern Division of Pronghorn, Inc. Contribution…

A: Return on investment :— It is the ratio between operating income and average operating assets. It is…

Q: Required information Use the following information for the Problems below: The following data…

A: ROI means return on investment. It is the percentage return earned by the entity on the operating…

Q: Profit Margin, Investment Turnover, and return on investment The condensed income statement for the…

Q: The sales, income from operations, and invested assets for each division of Jackson Corporation are…

A: The ratio analysis helps to analyze the financial statements of the business on the basis of various…

Q: Using the following data, estimate the new Return on Investment if there is a 10% decrease in…

A: Return on investment is the ratio of net income to average operating assets. It means how much…

Q: AB Division for National Company has a rate of return on investment of 28% and an investment…

A: Profit margin can be calculated by dividing return on investment by investment turnover ratio.

Q: Use the following information for the Problems below: The following data pertain to three divisions…

Q: Using the following data, estimate the new Return on Investment if there is a 10% increase in sales…

A: The formula for Return on Investment taking Average operating assets as the base: Return on…

Q: Use the following information for the Problems below: The following data pertain to three divisions…

A: We can use the following formula to find the missing values of the table.Formula used for…

Q: operating assets ting income required rate of return. Division A $ 12,600,000 $ 3,150,000 $ 516,600…

A: Return on investment (ROI) is a performance statistic used to evaluate the efficiency or…

Q: Profit Margin, Investment Turnover, and return on investment The condensed income statement for the…

A: Profit Margin :— It is calculated by dividing net operating income by sales. Investment Turnover…

Q: The following results pertain to an investment center. Sales $ 1,577,200 Variable costs…

A: Net profit = sales - variable cost - fixed cost = $1577,200 - 820,000 - 114000 = $643200 Return on…

Q: The following information is available about the status and operations of VTS Company, which has a…

A: Division B present situation Asset Turnover =…

Q: The following information is available about the status and operations of Big Shot Corp., which has…

A: SOLUTION- THE RESIDUAL INCOME AND RETURN ON INCOME ARE RELATED TO EACH OTHER . THE ROI AT 15% WOULD…

Q: Required Information [The following information applies to the questions displayed below.] Megamart…

A: Return on investment (ROI) is calculated by dividing net operating income by average operating…

Q: Selected sales and operating data for three divisions of different structural engineering firms are…

A: Margin :— It is the ratio of net operating income and sales. Turnover :— It is the ratio of sales…

Q: Megamart provides the following information on its two investment centers. Investment Center…

A: The answer is in the explanation section below.Explanation:Electronics Center:1. Income:…

Q: Deuk Seon have the following investment centers. Several items are missing from the following table…

A: Rate of return on investments means income from operations earned on invested assets. Residual…

Q: Using the following data, estimate the new Return on Investment if there is a 11% decrease in…

A: ROI taking average operating assets as the base is calculated by taking net profit and dividing it…

Q: Roy Toy, a division of Fun Corp. has a net operating income of $60000 and average operating assets…

A: Solution 1: Residual income = net operating income - Minimum required income = 60000 - (300000*15%)…

Q: Presented below is information related to the Southern Division of Lumber Ltd. Contribution margin…

A: To calculate the Southern Division's Return on investment (ROI),you can use the formula:ROI =…

Q: Using the following data, estimate the new Return on Investment if there is a 13% decrease in the…

A: Return on investment = Operating income/ average investment

Q: Presented below is information related to the Southern Division of Lumber Ltd. Contribution margin…

A: To calculate the Southern Division's Return on investment (ROI),you can use the formula:ROI =…

Q: rofit Margin, Investment Turnover, and return on investment The condensed income statement for the…

A: The investment turnover ratio shows the ability of the company to generate revenue, When the…

Q: For its three investment centers, Gerrard Company accumulates the following data: Sales $1,940,000…

A: Return on investment is the financial ratio that measures the profitability of gaining return from…

Q: Using the following data, estimate the new Return on Investment if there is a 10% increase in sales…

A: Return on investment is often calculated by dividing the controllable margin by either average…

Q: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's…

A: ROI means return on investment. It is the percentage return earned by the entity on the operating…

Q: Protax income Allocated costs() Labor expens Research and development (uncontrollable) Depreciation…

A: Residual income is the difference of net income and income desired by the entity. The formula is as…

Question

The following data relate to the Motor Division of Young Company:
Sales P10,000,000
Variable costs 3,000,000
Direct fixed costs 5,000,000
Invested capital 8,000,000
Allocated actual interest costs 800,000
Capital charge 12%

Question: What is the divisional return on investment?

Formula Formula ROI (%) = Net Income Principal Amount × 100

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The sales and cost data for two companies in the transportation industry are as follows: X Company Y Company Amount Percent Amount Percent Sales $ 136,000 100.00 $ 136,000 100.00 Variable costs 81,600 60.00 40,800 30.00 Contribution margin 54,400 40.00 95,200 70.00 Fixed costs 36,400 72,450 Operating income (πB) $ 18,000 $ 22,750 The annual breakeven point in sales dollars for X Company is: Multiple Choice $103,857. $91,000. $64,000. $111,769. $92,657.
Using the following data, estimate the new Return on Investment if there is a 10% increase in sales - with average operating assets as the base. Sales $2,000,000 Variable costs 1,100,000 Contribution margin 45% 900.000 Controllable fıxed costs 300.000 Controllable margin $600,000 Average operating assets $5,000,000 Round to two decimal places. Be sure to enter the answer as a percentage but do not include the % sign.
Profit Margin, Investment Turnover, and Return on Investment The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department allocations): Sales $1,980,000 Cost of goods sold (891,000) Gross profit $1,089,000 Administrative expenses (594,000) Operating income $495,000 The manager of the Consumer Products Division is considering ways to increase the return on investment. a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $3,300,000 of assets have been invested in the Consumer Products Division. Round the investment turnover to one decimal place. Profit margin fill in the blank 1 % Investment turnover fill in the blank 2 Return on investment fill in the blank 3 % b. If expenses could be reduced by $99,000 without decreasing sales, what would be the impact on…
Fixed assets= 5,00,000 Current assets (other than debtors) 3,00,000 Debtors =2,00,000 Annual fixed cost of the division= 8,00,000 Variable cost per unit of product 10 Budgeted volume of production per year (units)= 4,00,000 Desired return on investment 28% You are required to determine the transfer price for the division A. Falcon co fixes the inter-divisional transfer prices for its products on the basis of cost plus and estimated return on investment in its division. The details given above was related toDivision A for the year 2019-20.
Please help me
What is EVA for Division Y?
Using the following data, estimate the new Return on Investment if there is a 9% decrease in the average operating assets - with the new average operating assets as the base. Sales $2,217,038 Contribution margin Controllable foxxed costs Average operating assets 34% 283,398 $4,189,521 Round to two decimal places. Be sure to enter the answer as a percentage but do not include the % sign.
None
Tom Company reports the following data: Sales Variable costs Fixed costs Determine Tom Company's operating leverage. Round your answer to one decimal place. $156,332 81,532 30,800
genow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Lo... r Operating Leverage Teague Co. reports the following data: Sales Variable costs Contribution margin Fixed costs $480,000 264,000 $216,000 175,200 $40,800 Income from operations Determine Teague Co.'s operating leverage. Round your answer to one decimal place.
Selected sales and operating data for three divisions of different structural engineering firms are given below: Division C $ 25,450,000 $ 5,090,000 $636,250 12.50% Sales Average operating assets Net operating income Minimum required rate of return Division A $ 12,360,000 $ 3,090,000 $ 494,400 7.00% Required: 1. Compute each division's margin, turnover, and return on investment (ROI). 2. Compute each division's residual income (loss). 3. Assume each division is presented with an investment opportunity yielding a 8% rate of return. a. If performance is being measured by ROI, which division or divisions will accept the opportunity? b. If performance is being measured by residual income, which division or divisions will accept the opportunity? Division B $ 28,360,000 $ 7,090,000 $ 453,760 7.50% Complete this question by entering your answers in the tabs below. Division A Division B Division C Required 1 Required 2 Required 3A Required 3B Assume each division is presented with an…
Using the following data, estimate the new Return on Investment if there is a 11% decrease in the average operating assets - with the new average operating assets as the base. Sales $2,565,862 Contribution margin 48% Controllable fixed costs 293,294 Average operating assets $4,671,197 Round to two decimal places. Be sure to enter the answer as a percentage but do not include the % sign.