ACCOUTING PRIN SET LL INCLUSIVE
14th Edition
ISBN: 9781119815327
Author: Weygandt
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Question
Chapter 25, Problem 16E
a
To determine
Introduction:
The responsibility report prepared by the management determines the contribution margin and controllable margin. Here, the contribution margin is computed by subtracting variable costs from revenue, and the controllable margin is computed by subtracting controllable fixed costs from the contribution margin.
To prepare: The responsibility report.
b
To determine
Introduction:
To calculate: The ROI.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The sports equipment division of Kevin Hall Company is operated as a profit centre. Sales for the division were
budgeted for 2022 at $896,000. The only variable costs budgeted for the division were cost of goods sold
($442,000) and selling and administrative costs ($64,000). Fixed costs were budgeted at $102,000 for cost of goods
sold, $92,000 for selling and administrative costs, and $75,000 for noncontrollable fixed costs. Actual results were as
follows:
Sales
$864,000
Cost of goods sold
Variable
416,000
Fixed
106,000
Selling and administrative costs
Variable
65,000
Fixed
73,000
Noncontrollable fixed costs
91,000
Assume the division is an investment centre, and average operating assets were $1,000,000.
What is ROI?
The Camping Division of JA Company is operated as a profit center. Sales for the division were budgeted for 2020 at $694,000, The
only variable costs budgeted for the division were cost of goods sold ($342,000) and selling and administrative ($48,000). Fixed costs
were budgeted at $79,000 for cost of goods sold, $71,000 for selling and administrative, and $68,000 for noncontrollable fixed costs.
Actual results for these items were:
Sales
$673,000
Cost of goods sold
Variable
318,000
Fixed
84,000
Selling and administrative
Variable
49,000
Fixed
52,000
Noncontrollable fixed
68,000
The Real Estate Products Division of Ivanhoe Co. is operated as a profit center. Sales for the division were budgeted for 2022 at
$1,260,000. The only variable costs budgeted for the division were cost of goods sold ($618,000) and selling and administrative
($84,000). Fixed costs were budgeted at $136,000 for cost of goods sold, $126,000 for selling and administrative costs, and $99,000
for noncontrollable fixed costs. Actual results for these items were as follows:
Sales
Cost of goods sold
Variable
Fixed
$1,187,572
551,000
150,000
Selling and
administrative
Variable
Fixed
90,000
104,000
Noncontrollable fixed
109,000
Prepare a responsibility report for the Real Estate Products Division for 2022. (List variable costs before fixed costs.)
IVANHOE CO.
Real Estate Products Division
Responsibility Report
2022
Budget
$
$
Actual
$
Difference
Favorable (F)
Unfavorable (U)
Not Applicable (NA
Chapter 25 Solutions
ACCOUTING PRIN SET LL INCLUSIVE
Ch. 25 - Prob. 1QCh. 25 - Prob. 2QCh. 25 - Prob. 3QCh. 25 - 4. Ken Bay questions the usefulness of a master...Ch. 25 - Prob. 5QCh. 25 - Prob. 6QCh. 25 - Prob. 7QCh. 25 - Prob. 8QCh. 25 - Prob. 9QCh. 25 - Prob. 10Q
Ch. 25 - Prob. 11QCh. 25 - Prob. 12QCh. 25 - Prob. 13QCh. 25 - Prob. 14QCh. 25 - Prob. 15QCh. 25 - Prob. 16QCh. 25 - Prob. 17QCh. 25 - Prob. 18QCh. 25 - Prob. 19QCh. 25 - Prob. 20QCh. 25 - Prob. 21QCh. 25 - Prob. 22QCh. 25 - Prob. 23QCh. 25 - Prob. 24QCh. 25 - Prob. 25QCh. 25 - Prob. 26QCh. 25 - Prob. 1BECh. 25 - Prob. 2BECh. 25 - Prob. 3BECh. 25 - Prob. 4BECh. 25 - Prob. 5BECh. 25 - Prob. 6BECh. 25 - (LO 3) Torres Company accumulates the following...Ch. 25 - Prob. 8BECh. 25 - Prob. 9BECh. 25 - Prob. 10BECh. 25 - Prob. 11BECh. 25 - Prob. 12BECh. 25 - Prob. 1DIECh. 25 - Prob. 2DIECh. 25 - Prob. 3DIECh. 25 - Prob. 4DIECh. 25 - Prob. 1ECh. 25 - E24-2 Crede Company budgeted selling expenses of...Ch. 25 - Prob. 3ECh. 25 - Prob. 4ECh. 25 - Prob. 5ECh. 25 - Prob. 6ECh. 25 - Prob. 7ECh. 25 - Prob. 8ECh. 25 - Prob. 9ECh. 25 - Prob. 10ECh. 25 - Prob. 11ECh. 25 - Prob. 12ECh. 25 - Prob. 13ECh. 25 - Prob. 14ECh. 25 - Prob. 15ECh. 25 - Prob. 16ECh. 25 - Prob. 17ECh. 25 - Prob. 18ECh. 25 - Prob. 19ECh. 25 - Prob. 20ECh. 25 - Prob. 21ECh. 25 - Prob. 1PSACh. 25 - (LO 2) Zelmer Company manufactures tablecloths....Ch. 25 - Prob. 3PSACh. 25 - Prob. 4PSACh. 25 - Prob. 5PSACh. 25 - Prob. 6PSACh. 25 - Prob. 7PSACh. 25 - Service Green Pastures is a 400-acre farm on the...Ch. 25 - Prob. 2EYCTCh. 25 - Prob. 3EYCTCh. 25 - Prob. 4EYCTCh. 25 - Prob. 5EYCTCh. 25 - Prob. 7EYCT
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- please help me with full workingarrow_forwardThe Real Estate Products Division of McKenzie Co. is operated as a profit center. Sales for the division were budgeted for 2016 at $1,250,000. The only variable costs budgeted for the division were cost of goods sold ($610,000) and selling and administrative ($80,000). Fixed costs were budgeted at $130,000 for cost of goods sold, $120,000 for selling and administrative and $95,000 for noncontrollable fixed costs. Actual results for these items were: Sales $1,175,000 Cost of goods sold Variable 545,000 Fixed 140,000 Selling and administrative Variable 82,000 Fixed 100,000 Noncontrollable fixed 105,000 Instructions (a) Prepare a responsibility report for the Real Estate Products Division for 2016. (b) Assume the division is an investment center, and average operating assets were $1,200,000. Compute Return On Investment(ROI).arrow_forwardNanda Company has two service departments, Maintenance and Personnel. Maintenance Department costs of P160,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of P40,000 are allocated based on the number of employees. The costs of operating departments A and B are P80,000 and P120,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Support Departments Production Departments Maintenance A B Department Budgeted costs P160,000 P40,000 P80,000 P120,000 Budgeted ΝΑ 400 480 320 maintenance-hours Number of employees 20 ΝΑ 80 240 Using the step-down method, what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up) Personnel Departmentarrow_forward
- Bonita Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2020, and relevant budget data are as follows. Actual Comparison with Budget Sales $1,399,000 $101,000 favorable Variable cost of goods sold 680,000 55,000 unfavorable Variable selling and administrative expenses 124,000 25,000 unfavorable Controllable fixed cost of goods sold 171,000 On target Controllable fixed selling and administrative expenses 81,000 On target Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted amount. (a) Prepare a responsibility report for the Home Division. (List variable costs before fixed costs. Round ROI to 2 decimal places, e.g. 1.57%.) BONITA COMPANYHome DivisionResponsibility ReportFor the Year Ended…arrow_forwardBonita Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2020, and relevant budget data are as follows. Actual Comparison with Budget Sales $1,399,000 $101,000 favorable Variable cost of goods sold 680,000 55,000 unfavorable Variable selling and administrative expenses 124,000 25,000 unfavorable Controllable fixed cost of goods sold 171,000 On target Controllable fixed selling and administrative expenses 81,000 On target Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted amount. Compute the expected ROI in 2020 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 2 decimal places, e.g. 1.57%.) The expected ROI (1) Variable cost of goods sold is…arrow_forwardGiven help with this problem is solutionarrow_forward
- The following data relates to a company's operating budget for its next operating year Sales price per unit (E) 26 Sales volume units) 39,000 Costs: Materials () 30,000 Labour (E) 33.800 Energy (E 37,000 Depreciation (E) 105,000 The budget has been prepared using the following assumptions Materials costs are variable. Labour costs are semi-variable with a fxed element of 15,000. Depreciation is a foxed cost. An allowance for an energy price increase of 11% has already been inchuded in the enegY costs The company now wishes to revise the data to incorporate the following updated assumptions: Selling prices will be reduced by B% The sales vokume will increase by 10% The rise in the energy prices should be revised to 7% What will be the company's new materials cost for the year?arrow_forwardMillenium Bhd is a manufacturing company which produces one type of product, Z3. The current year’s budget based on the production and sales of 40,000 units of Z3 shows the following data: RM Total variable costs 2,520,000 Fixed overhead costs: Production 2,900,000 Administrative 500,000 Selling and distribution 578,000 Total contribution 4,680,000 The manager is not satisfied with the current sales and budgeted annual profit. He wishes to have a minimum annual profit of RM1,000,000. He suggests that the product should be advertised on television which will incur additional cost of RM50,000. He also proposes to hire a consultant and the annual fee is RM252,000. As a result of these sales volume will increase by 32%. The variable cost per unit will remain unchanged. Required: a. Using the current budgeted data only, calculate: i. the annual profit ii. the selling price per unit iii. the break-even…arrow_forwardAAA Manufacturing Firm has provided the following sales, cost and expense figures in relation to expected operations for the coming year. You are tasked to prepare forecast Statements of Financial Performance using flexible budget techniques and incorporating the following information.All units are sold when manufactured due to the highly perishable nature of the company’s product. As such there are no inventories of raw materials, work in process or finished goods on hand.The selling price of the company’s single product is $50.00 and the expected sales quantity for the coming year is in the vicinity of 20,000 and 25,000 units.Required: Prepare an Income Statement budget using flexible budgeting techniques at production and sales levels of:(Scenario a) 20,000 units(Scenario b) 25,000 units Question: 1. Total fixed factory overhead under Scenario A (No dollar sign and comma) 2. Gross profit under Scenario B? (No dollar sign and comma) 3. Total non-manufacturing expenses under…arrow_forward
- I want to answer this questionarrow_forwardThe following data relates to a company's operating budget for its next operating year: Sales price per unit (E) 11 Sales volume (units) 90,000 Costs: Materials (E) 52.500 Labour (E) 33,800 Energy (E) 25,000 Depreciation (£) 105,000 The budget has been prepared using the following assumptions:, Materials costs are variable. Labour costs are semi-variable with a fixed element of E15.000 Depreciation is a fixed cost. An allowance for an energy price increase of 13% has already been included in the energy costs. The company now wishes to revise the data to incorporate the following updated assumptions: Selling prices will be reduced by 7% The sales volume will increase by 6% The rise in the energy prices should be revised to 6% What will be the company's new energy cost for the year?arrow_forward6arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
What is Risk Management? | Risk Management process; Author: Educationleaves;https://www.youtube.com/watch?v=IP-E75FGFkU;License: Standard youtube license