Describe the specific actions which the division managers have taken to cause the ROI to get increased in each of the division but decrease for the corporation.

Question

Want to see the full answer?

Answer 1

Question

Chapter 14, Problem 50P

a.

To determine

Describe the specific actions which the division managers have taken to cause the ROI to get increased in each of the division but decrease for the corporation.

b.

To determine

Use the concepts of goal congruence and motivation of division executives and explain how the over-emphasis on the use of the ROI measure at Company A has resulted in the decline in the ROI of the company and the increase in cash and short term marketable securities.

C

To determine

Explain the changes that could be made in Company A’s compensation policy to avoid this problem.

c.

To determine

Define whether the actions of the divisional manager to increase the divisional ROI but not giving importance to the company’s ROI is an ethical practice.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

General Accounting Question

What is the gross profit margin on these financial accounting question?

What is the direct labor rate variance of these general accounting question?

Answer 2

Question

Chapter 14, Problem 50P

a.

To determine

Describe the specific actions which the division managers have taken to cause the ROI to get increased in each of the division but decrease for the corporation.

b.

To determine

Use the concepts of goal congruence and motivation of division executives and explain how the over-emphasis on the use of the ROI measure at Company A has resulted in the decline in the ROI of the company and the increase in cash and short term marketable securities.

C

To determine

Explain the changes that could be made in Company A’s compensation policy to avoid this problem.

c.

To determine

Define whether the actions of the divisional manager to increase the divisional ROI but not giving importance to the company’s ROI is an ethical practice.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 14, Problem 50P

a.

To determine

Describe the specific actions which the division managers have taken to cause the ROI to get increased in each of the division but decrease for the corporation.

b.

To determine

Use the concepts of goal congruence and motivation of division executives and explain how the over-emphasis on the use of the ROI measure at Company A has resulted in the decline in the ROI of the company and the increase in cash and short term marketable securities.

C

To determine

Explain the changes that could be made in Company A’s compensation policy to avoid this problem.

c.

To determine

Define whether the actions of the divisional manager to increase the divisional ROI but not giving importance to the company’s ROI is an ethical practice.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 14, Problem 50P

a.

To determine

Describe the specific actions which the division managers have taken to cause the ROI to get increased in each of the division but decrease for the corporation.

b.

To determine

Use the concepts of goal congruence and motivation of division executives and explain how the over-emphasis on the use of the ROI measure at Company A has resulted in the decline in the ROI of the company and the increase in cash and short term marketable securities.

C

To determine

Explain the changes that could be made in Company A’s compensation policy to avoid this problem.

c.

To determine

Define whether the actions of the divisional manager to increase the divisional ROI but not giving importance to the company’s ROI is an ethical practice.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 14, Problem 50P

a.

To determine

Describe the specific actions which the division managers have taken to cause the ROI to get increased in each of the division but decrease for the corporation.

b.

To determine

Use the concepts of goal congruence and motivation of division executives and explain how the over-emphasis on the use of the ROI measure at Company A has resulted in the decline in the ROI of the company and the increase in cash and short term marketable securities.

C

To determine

Explain the changes that could be made in Company A’s compensation policy to avoid this problem.

c.

To determine

Define whether the actions of the divisional manager to increase the divisional ROI but not giving importance to the company’s ROI is an ethical practice.

Answer 6

Chapter 14, Problem 50P

a.

To determine

Describe the specific actions which the division managers have taken to cause the ROI to get increased in each of the division but decrease for the corporation.

Answer 7

Chapter 14, Problem 50P

a.

To determine

Describe the specific actions which the division managers have taken to cause the ROI to get increased in each of the division but decrease for the corporation.

Answer 8

b.

To determine

Use the concepts of goal congruence and motivation of division executives and explain how the over-emphasis on the use of the ROI measure at Company A has resulted in the decline in the ROI of the company and the increase in cash and short term marketable securities.

Answer 9

b.

To determine

Use the concepts of goal congruence and motivation of division executives and explain how the over-emphasis on the use of the ROI measure at Company A has resulted in the decline in the ROI of the company and the increase in cash and short term marketable securities.

Answer 10

C

To determine

Explain the changes that could be made in Company A’s compensation policy to avoid this problem.

Answer 11

C

To determine

Explain the changes that could be made in Company A’s compensation policy to avoid this problem.

Answer 12

c.

To determine

Define whether the actions of the divisional manager to increase the divisional ROI but not giving importance to the company’s ROI is an ethical practice.

Answer 13

c.

To determine

Define whether the actions of the divisional manager to increase the divisional ROI but not giving importance to the company’s ROI is an ethical practice.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 17

Ch. 14 - What are the advantages of divisional income as a...Ch. 14 - How is divisional income like income computed for...Ch. 14 - How is return on investment (ROI) computed?Ch. 14 - What are the advantages of using an ROI-type...Ch. 14 - How can ratios, such as ROI, be used for control...Ch. 14 - How does residual income differ from ROI?Ch. 14 - How does EVA differ from residual income?Ch. 14 - What impact does the use of gross book value or...Ch. 14 - What are the dangers of using only business unit...Ch. 14 - A company prepares the master budget by taking...

Describe the specific actions which the division managers have taken to cause the ROI to get increased in each of the division but decrease for the corporation.

Solution Summary: The author explains the concepts of goal congruence and motivation of division executives and how the over-emphasis on the use of the ROI measure at Company A has resulted in increased divisional ROI and decreased corporation ROI

Describe the specific actions which the division managers have taken to cause the ROI to get increased in each of the division but decrease for the corporation.

Use the concepts of goal congruence and motivation of division executives and explain how the over-emphasis on the use of the ROI measure at Company A has resulted in the decline in the ROI of the company and the increase in cash and short term marketable securities.

Explain the changes that could be made in Company A’s compensation policy to avoid this problem.

Define whether the actions of the divisional manager to increase the divisional ROI but not giving importance to the company’s ROI is an ethical practice.

Want to see the full answer?

Chapter 14 Solutions