Solution with steps of the financial accounting Problem The income from operations and the amount of invested assets ineach division of Lucifer Industries are as follows:Income from Operations Invested AssetsSporting Goods Division $107,000Health Care DivisionCommercial Division$126,900$59,500$565,000$692,000$365,000• Required: Compute the rate of return on investment for eachdivision. (Round to the nearest whole number.)

Concept of Income from OperationsIncome from operations represents the profit earned by a division…

Answered: The income from operations and the…

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 10E

See similar textbooks

Similar questions

Want answer
The sales, income from operations, and invested assets for each division of Grosbeak Company are as follows: Sales Income fromOperations InvestedAssets Division E $5,000,000 $550,000 $2,400,000 Division F 4,800,000 860,000 2,500,000 Division G 7,000,000 860,000 2,900,000 a. Using the DuPont formula, determine the profit margin, investment turnover, and rate of return on investment for each division. Round profit margin to two decimal places, investment turnover to four decimal places and rate of return on investment to one decimal place. Division E Division F Division G Profit Margin % % % Investment Turnover Rate of return on investment % % % b. Which division is the most profitable per dollar invested?
(J) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division ADivision BDivision CSales$ 12,120,000$ 28,120,000$ 20,120,000Average operating assets$ 3,030,000$ 7,030,000$ 5,030,000Net operating income$ 496,920$ 449,920$ 503,000Minimum required rate of return7.00%7.50%10.00%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 yield 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 being measured by residual income, which division or divisions will probably accept the opportunity
Alpesh
Shaq Company operates with three segments: Louisiana, Orlando, and Los Angeles.Data regarding these segments is as follows: LouisianaSegment OrlandoSegment Los AngelesSegment Contribution to indirect expenses $328,500 $207,600 $155,500 Assets directly used & identified with segment $1,858,700 $1,410,000 $742,600 1. Calculate the return on investment for each segment. Rank them from highest to lowest. Round percent to 1 decimal place. LouisianaSegment OrlandoSegment Los AngelesSegment Segment Net Income Investment base (assets) ROI (%) Rankings (1,2, or 3, where 1 is the best) 2. Assume the cost of capital is 14% for a segment. Calculate residual income for each segment. Rank them from highest to lowest. Round percent to 1 decimal place. LouisianaSegment OrlandoSegment Los AngelesSegment Segment Net Income Investment base (assets) Cost of Capital (%) Minimum Income Residual Income…
The following data are available for Segment X of XYZ Company: Net income of the segment $50,000 Contribution to indirect expenses 40,000 Controllable income by manager 48,000 Assets directly used by the manager 360,000 Assets under the control of the segment 240,000 manager Determine the return on investment for evaluating 1. the income performance of the manager of Segment X and 2. the rate of income contribution of the segment. Answer:
Kyle Corporation provides the following information for the Product Division and Service Division for the year. Product Division Service Division 420,000 $ 650,000 195,000 245,000 640,000 610,000 14.0% 14.0% Net sales Operating income Average total assets Target rate of return $ Requirement 1. Calculate the return on investment for each division. (Enter answers as a percent rounded to the nearest hundredth percent, X.XX%) The return on investment for the Product Division is The return on investment for the Service Division is Requirement 2. Which division has the highest ROI? % % Requirement 3. Calculate the residual income for each division. (Round answers to the nearest whole dollar.) The residual income for the Product Division is The residual income for the Service Division is Requirement 4. Which division has the highest residual income?
solve
Evaluate the performance of the two divisions assuming Lasky Manufacturing uses economic value added (EVA). Note: Note: Enter answers in thousands of dollars. Round your answers to 1 decimal place.
The operating income and the amount of invested assets in each division of Conley Industries are as follows: Operating income Invested Assets Retail Division $123,900 $590,000 Commercial Division 182,400 760,000 Internet Division 137,800 530,000 Assume that management has established a 12% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Commercial Division Internet Division Operating income $123,900 $182,400 $137,800 Minimum acceptable operating income as a percent of invested assets Residual income $ $ $ b. Which division has the most residual income?
The income from operations and the amount of invested assets in each division of Beck Industries are as follows: Income from Operations Invested Assets Retail Division $96,900 510,000 Commercial Division 64,600 380,000 Internet Division 141,600 590,000 Assume that management has established a 8% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Commercial Division Internet Division Income from operations $96,900 $64,600 $141,600 Minimum acceptable of income from operations Residual income b. Which division has the most residual income? Internet Division
The following information is provided for each division. Investment Center Cameras and camcorders Net Income $6,150,000 2,310,000 1,100,000 Average Assets $23,300,000 16,500,000 11,600,000 Phones and communications Computers and accessories Assume a target income of 14% of average invested assets. Required: Compute residual income for each division. (Enter losses with a minus sign.) Computers and Accessories Cameras and Phones and Target Income Camcorders Communications % % % Targeted return Target income Cameras and Camcorders Phones and Communications Computers and Accessories Residual Income Residual income (loss)

SEE MORE QUESTIONS

Recommended textbooks for you

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

Financial And Managerial Accounting

Accounting

ISBN:

9781337902663

Author:

WARREN, Carl S.

Publisher:

Cengage Learning,

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

Financial And Managerial Accounting

Accounting

ISBN:

9781337902663

Author:

WARREN, Carl S.

Publisher:

Cengage Learning,

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

SEE MORE TEXTBOOKS