Residual Income: The residual income is that income which is derived after deducting the return on the investment from the net income. Residual income is a favorable measure as it focuses on maximizing the return on the investment and helps in achieving the goal congruence. Return on Investment : The return on investment is a measure of the return which is derived from the part of the income which is invested. It is calculated by dividing the income from the investment. Economic Value Added: The economic value added is the excess of the income over the required return on the investment which is the residual income. To determine: The U.S. division’s operating income for 2017.

Question

Please solve this question general Accounting

Answer 1

Question

Chapter 23, Problem 23.29E

1. a.

To determine

Residual Income:

The residual income is that income which is derived after deducting the return on the investment from the net income. Residual income is a favorable measure as it focuses on maximizing the return on the investment and helps in achieving the goal congruence.

Return on Investment:

The return on investment is a measure of the return which is derived from the part of the income which is invested. It is calculated by dividing the income from the investment.

Economic Value Added:

The economic value added is the excess of the income over the required return on the investment which is the residual income.

To determine: The U.S. division’s operating income for 2017.

1. b.

To determine

The Norwegian’s division’s ROI for 2017 in kroner.

2.

To determine

To explain: The top management about the division which earned better in 2017.

3.

To determine

The division which has the better residual income performance.

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Clear Manufacturing uses powdered plastics (PPS) to manufacture a high-pressure board used in a digital equipment product, Flex 10. Information concerning its operation in June is as follows: Budgeted units of Flex 10 for June 5,000 Budgeted usage of PPS 45,000 pounds Actual number of units of Flex 10 4,000 PPS purchased and used 39,000 pounds Total actual cost of PPS used $ 2,24,640 $21,600 unfavorable Direct materials usage variance Clear does not maintain an inventory of materials, so the amount of materials used is equal to the amount of materials purchased. The cost of PPS in the flexible budget for the number of units manufactured this period is: a. $259,200. b. $280,800. c. $311,040. d. $324,000. e. $360,000.

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Answer 2

Question

Chapter 23, Problem 23.29E

1. a.

To determine

Residual Income:

The residual income is that income which is derived after deducting the return on the investment from the net income. Residual income is a favorable measure as it focuses on maximizing the return on the investment and helps in achieving the goal congruence.

Return on Investment:

The return on investment is a measure of the return which is derived from the part of the income which is invested. It is calculated by dividing the income from the investment.

Economic Value Added:

The economic value added is the excess of the income over the required return on the investment which is the residual income.

To determine: The U.S. division’s operating income for 2017.

1. b.

To determine

The Norwegian’s division’s ROI for 2017 in kroner.

2.

To determine

To explain: The top management about the division which earned better in 2017.

3.

To determine

The division which has the better residual income performance.

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Answer 3

Question

Chapter 23, Problem 23.29E

1. a.

To determine

Residual Income:

The residual income is that income which is derived after deducting the return on the investment from the net income. Residual income is a favorable measure as it focuses on maximizing the return on the investment and helps in achieving the goal congruence.

Return on Investment:

The return on investment is a measure of the return which is derived from the part of the income which is invested. It is calculated by dividing the income from the investment.

Economic Value Added:

The economic value added is the excess of the income over the required return on the investment which is the residual income.

To determine: The U.S. division’s operating income for 2017.

1. b.

To determine

The Norwegian’s division’s ROI for 2017 in kroner.

2.

To determine

To explain: The top management about the division which earned better in 2017.

3.

To determine

The division which has the better residual income performance.

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Answer 4

Question

Chapter 23, Problem 23.29E

1. a.

To determine

Residual Income:

The residual income is that income which is derived after deducting the return on the investment from the net income. Residual income is a favorable measure as it focuses on maximizing the return on the investment and helps in achieving the goal congruence.

Return on Investment:

The return on investment is a measure of the return which is derived from the part of the income which is invested. It is calculated by dividing the income from the investment.

Economic Value Added:

The economic value added is the excess of the income over the required return on the investment which is the residual income.

To determine: The U.S. division’s operating income for 2017.

1. b.

To determine

The Norwegian’s division’s ROI for 2017 in kroner.

2.

To determine

To explain: The top management about the division which earned better in 2017.

3.

To determine

The division which has the better residual income performance.

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Answer 5

Chapter 23, Problem 23.29E

1. a.

To determine

Residual Income:

The residual income is that income which is derived after deducting the return on the investment from the net income. Residual income is a favorable measure as it focuses on maximizing the return on the investment and helps in achieving the goal congruence.

Return on Investment:

The return on investment is a measure of the return which is derived from the part of the income which is invested. It is calculated by dividing the income from the investment.

Economic Value Added:

The economic value added is the excess of the income over the required return on the investment which is the residual income.

To determine: The U.S. division’s operating income for 2017.

1. b.

To determine

The Norwegian’s division’s ROI for 2017 in kroner.

2.

To determine

To explain: The top management about the division which earned better in 2017.

3.

To determine

The division which has the better residual income performance.

Answer 6

Chapter 23, Problem 23.29E

1. a.

To determine

Residual Income:

The residual income is that income which is derived after deducting the return on the investment from the net income. Residual income is a favorable measure as it focuses on maximizing the return on the investment and helps in achieving the goal congruence.

Return on Investment:

The return on investment is a measure of the return which is derived from the part of the income which is invested. It is calculated by dividing the income from the investment.

Economic Value Added:

The economic value added is the excess of the income over the required return on the investment which is the residual income.

To determine: The U.S. division’s operating income for 2017.

Answer 7

Chapter 23, Problem 23.29E

1. a.

To determine

Residual Income:

The residual income is that income which is derived after deducting the return on the investment from the net income. Residual income is a favorable measure as it focuses on maximizing the return on the investment and helps in achieving the goal congruence.

Return on Investment:

The return on investment is a measure of the return which is derived from the part of the income which is invested. It is calculated by dividing the income from the investment.

Economic Value Added:

The economic value added is the excess of the income over the required return on the investment which is the residual income.

To determine: The U.S. division’s operating income for 2017.

Answer 8

1. b.

To determine

The Norwegian’s division’s ROI for 2017 in kroner.

Answer 9

1. b.

To determine

The Norwegian’s division’s ROI for 2017 in kroner.

Answer 10

2.

To determine

To explain: The top management about the division which earned better in 2017.

Answer 11

2.

To determine

To explain: The top management about the division which earned better in 2017.

Answer 12

3.

To determine

The division which has the better residual income performance.

Answer 13

3.

To determine

The division which has the better residual income performance.

Answer 14

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Solution Summary: The author explains the calculation of the U.S. division's operating income for 2017 in kroner.

The Norwegian’s division’s ROI for 2017 in kroner.

To explain: The top management about the division which earned better in 2017.

The division which has the better residual income performance.

Chapter 23 Solutions