?! The following selected data relate to the Texas Division ofOut West Inc.Sales revenue: $3,580,000Uncontrollable fixed costs traceable to the division:$360,000Allocated corporate overhead: $90,000Controllable fixed costs traceable to the division: $12,000Variable costs: 35% of revenueCompute the following for the Texas Division:• Segment contribution margin

Explanation of Sales Revenue: Sales revenue represents the total amount of money generated from…

Answered: The following selected data relate to…

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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Rakesh
Chao, Incorporated, a service provider, has two divisions. The firm’s most recent annual contribution format segmented income statement appears below. Total Company Eastern Division Western Division Sales $ 450,000 $ 90,000 $ 360,000 Variable expenses 243,000 27,000 216,000 Contribution margin 207,000 63,000 144,000 Traceable fixed expenses 100,800 46,800 54,000 Division segment margin 106,200 $ 16,200 $ 90,000 Common fixed expenses 72,000 Net operating income $ 34,200 If the company eliminates the Western Division and the Eastern Division sales increase by 10% as a result, how much will the company’s net operating income decrease? multiple choice $83,700 $88,380 $90,000 $137,700 $144,000
Presented below is information related to the Annandale Division of Lumber, Inc. Contribution margin $1,211,900 Controllable margin $895,180 Average operating assets $4,069,000 Minimum rate of return 15 Compute the Annandale Division's residual income. $284,830 895,180 $150,000 $162,760
Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for the most recent operating period: Total Company Blue Division Gold Division Sales $ 522,000 $ 391,000 $ 131,000 Variable expenses 160,670 89,930 70,740 Contribution margin 361,330 301,070 60,260 Traceable fixed expenses 286,000 239,000 47,000 Segment margin 75,330 $ 62,070 $ 13,260 Common fixed expenses 73,080 Net operating income $ 2,250 The Gold Division's break-even sales is closest to: $102,174 $261,043 $142,043 $518,750
The following relates to Department no.2 of Niekut Corporation Segment contribution margin: 472,500 Profit margin controllable by segment manager 87,000 Segment profit margin 23,200 The amount that would be used to evaluate the performance of department no. 2's manager is:
Presented below is selected information for three regional divisions of Medina Company. Contribution margin Controllable margin Average operating assets Minimum rate of return. North $299,100 $140,000 $1,000,000 13 % Divisions West $500,700 $360,000 $1,500,000 15 % South $400,200 $208,600 $1,490,000 10 %
Franklin, Inc. has two divisions, Seward and Charles. Following is the income statement for the previous year: Seward Charles Sales $ 744,500 $ 744,500 Variable Costs 476,950 670,050 Contribution Margin $ 267,550 $ 74,450 Fixed Costs 124,400 124,400 Profit Margin $ 143,150 $ (49,950) Of the total fixed costs, $240,000 are common fixed costs that are allocated equally between the divisions. What would Franklin's profit margin be if Charles were dropped? A) $143,150 B) $267,550 C) $23,150 D) $744,500
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…
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $6,300,000 $1,260,000 $ 340,200 20.00% Division B $10,300,000 $ 5,150,000 $ 968,200 18.80% Division C $9,400,000 $1,880,000 $ 249,100 17.00% Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. I Margin Turnover ROI Division A 5.40 % times % Division B % 2.00 times :% Division C % times % 2. Compute the residual income (loss) for each division. (Loss amounts should be indicated by a minus sign. Roui Division A Division B Division C Average operating assets Required rate of return % % % Required operating income Actual operating income Required operating income (above) Residual income (loss) 3. Assume that each division is presented with an investment opportunity that would y a. If performance is being…
Selected sales and operating data for three divisions of different structural engineering firms are glven as follows: Division A $ 16, 200,000 $ 3,240,000 24 Division B Division C $ 26, 200,000 $ 5,240,000 Sales $ 28,960,000 Average operating assets Net operating income Minimum required rate of return 24 24 7,240,000 761,400 463,360 24 655,000 12.5e% 7.00% 7.5e% Required: 1. Compute the margin, turnover, and return on Investment (ROI) for each division. 2. Compute the residual Income (loss) for each division. 3. Assume that each division is presented with an Investment opportunity that would yleld a 8% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance Is belng measured by residual Income, which division or divislons will probably accept the opportunity?
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division B $ 14,175,000 $ 7,087,500 $ 567,000 10% Division C $ 25,312,500 $ 5,062,500 $ 810,000 16% Sales Average operating assets Net operating income Minimum required rate of return Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Req 1 Division A $ 12,150,000 $ 3,037,500 $ 607,500 14% Req 2 Division A Division…

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