1.
:
The margin, turnover, and return on investment (ROI) for Division A, Division B, and Division C.
2.
Residual income: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the number of excess earnings earned over and above the minimum required return of the capital invested.
:
The residual income of Division A, Division B, and Division C.
3 a.
Return on Investment or asset: It establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.
:
The division or divisions will probably accept or reject the opportunity if performance is being measured by ROI.
3 b.
Residual income: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the number of excess earnings earned over and above the minimum required return of the capital invested.
:
The division or divisions will probably accept or reject the opportunity if performance is being measured by Residual Income.
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Chapter 11 Solutions
MANAGERIAL ACCTING LL W/CNCT- UND CUSTOM
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- Summit Manufacturing has a standard costing system. The following data are available for October: • • Actual quantity of direct materials purchased: 40,000 pounds Standard price of direct materials: $6 per pound Material price variance: $4,800 unfavorable Material quantity variance: $3,200 favorable What is the actual price per pound of direct materials purchased in October?arrow_forwardI want to correct answer general accounting questionarrow_forwardGiven answer with calculation accountingarrow_forward
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