Question 1

Bentz Co. has two divisions, A and B. Invested assets and condensed income statement data for each division for the year ended December 31 are as follows:?  (a)Prepare condensed income statements for the past year for each division.
(b)Using the DuPont formula, determine the profit margin, investment turnover, and return on investment for each division. Round the profit margin percentage to two decimal places and investment turnover to four decimal places.

Accepted Answer

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Question 2

The sales, income from operations, invested assets, and residual income for each division of Marcus Company are as follows:​  Determine the minimum return for invested assets.

Accepted Answer

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Question 3

The following financial information was summarized from the accounting records of Buddy Corporation for the current year ended December 31:​  Calculate:
(a) The gross profit for the Dalmatian Division.
(b) The income from operations from the Dalmatian Division.
(c) The gross profit for the Beagle Division.
(d) The income from operations from the Beagle Division.
(e) The net income for Buddy Corporation.​

Accepted Answer

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Question 4

Paduka Industries has several divisions. The Eastern Division has $350,000 of invested assets, income from operations of $200,000, and residual income of $151,000. Determine the minimum acceptable return on divisional assets.

Accepted Answer

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Question 5

Miller's Quarter Horse Company has sales of $4,500,000. It also has invested assets of $2,500,000 and operating expenses of $3,800,000. The company has established a minimum return of 7%. If needed, round to one decimal place.
(a) What is Miller's profit margin?
(b) What is the investment turnover?
(c) What is the return on investment?
(d) What is Miller's residual income?

Accepted Answer

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Question 6

Materials used by Layton Company's Division 1 are currently purchased from an outside supplier at $58 per unit. Division 2 is able to supply Division 1 with 22,000 units at a variable cost of $46 per unit. The two divisions have recently negotiated a transfer price of $50 per unit for the 20,000 units.?
(a) By how much will each division's income increase as a result of this transfer?
(b) What is the total increase in income for Layton?

Accepted Answer

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Question 7

The sales, income from operations, and invested assets for each division of Wren Company are as follows:​  Management has established a minimum return for invested assets of 8%.
(a)Determine the residual income for each division.
(b)Based on residual income, which of the divisions is the most profitable?

Accepted Answer

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Question 8

The Creative Division of Barry Company reported the following results for December:​​  Based on this information, what were sales?

Accepted Answer

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Question 9

The materials used by Holly Company's Division A are currently purchased from an outside supplier. Division B is able to supply Division A with 20,000 units at a variable cost of $42 per unit. The normal price for which Division B normally sells its units is $53 per unit. What is the range of transfer prices within which the two division managers should negotiate?

Accepted Answer

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Question 10

Division G of Elephant Preservation Inc. has sales of $895,000, cost of goods sold of $475,000, operating expenses of $79,500, and invested assets of $750,000.?
Calculate:
(a) The return on investment for Division G.
(b) The profit margin for Division G.
(c) The investment turnover for Division G.

Accepted Answer

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Question 11

Ralston Company has income from operations of $75,000, invested assets of $360,000, and sales of $790,000.?Use the DuPont formula to calculate the return on investment, and show  (a) the profit margin,  (b) the investment turnover, and  (c) return on investment. Round the profit margin percentage to two decimal places and the investment turnover to three decimal places.

Accepted Answer

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Question 12

Materials used by Best Bread Company in producing Division A's product are currently purchased from outside suppliers at a cost of $30 per unit. However, the same materials are available from Division B. Division B has unused capacity and can produce the materials needed by Division A at a variable cost of $20 per unit.
(a)If a transfer price of $25 per unit is established and 60,000 units of material are transferred, with no reductions in Division B's current sales, how much would Best Bread Company's total income from operations increase?
(b)Assuming a transfer price of $25 per unit is established and 60,000 units of material are transferred, with no reductions in Division B's current sales, how much would the income from operations of Division A increase?
(c)Assuming a transfer price of $25 per unit is established and 60,000 units of material are transferred, with no reductions in Division B's current sales, how much would the income from operations of Division B increase?
(d)If the negotiated price approach is used, what would be the range of acceptable transfer prices?​

Accepted Answer

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Question 13

Data for Divisions A, B, C, D, and E are as follows:?  (a)Determine the missing items, identifying each by letter 
(a-o).Round percentage and turnover values to one decimal place.
(b)Which division is most profitable in terms of income from operations?
(c)Which division is most profitable in terms of return on investment??

Accepted Answer

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Question 14

The sales, income from operations, and invested assets for each division of Grosbeak Company are as follows:​  (a)Using the DuPont formula, determine the profit margin, investment turnover, and return on investment for each division. Round profit margin percentage to two decimal places, investment turnover to four decimal places, and return on investment to one decimal place.
(b)Which division is the most profitable per dollar invested?

Accepted Answer

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Question 15

Several items are missing from the following table of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter 
(a-l). Round percentage values to one decimal place.​

Accepted Answer

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Question 16

Magnolia Company's Division A has income from operations of $80,000 and assets of $400,000. The minimum acceptable return on assets is 12%. What is the residual income for the division?

Accepted Answer

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Question 17

The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $55 per unit. Division B is able to supply Division A with 20,000 units at a variable cost of $42 per unit. The two divisions have recently negotiated a transfer price of $48 per unit for the 20,000 units. 
(a) By how much will each division's income increase as a result of this transfer? 
(b) What is the total increase in income for Hibiscus Company?

Accepted Answer

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Question 18

Bottlebrush Company has income from operations of $60,000, invested assets of $345,000, and sales of $786,000. Use the DuPont formula to calculate the return on investment, and show 
(a) the profit margin, 
(b) the investment turnover, and 
(c) the return on investment. Round the profit margin percentage to two decimal places, the investment turnover to three decimal places, and the return on investment to two decimal places.

Accepted Answer

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Quiz 23: Decentralized Operations

The sales, income from operations, invested assets, and residual income for each division of Marcus Company are as follows: Determine the minimum return for invested assets.

Paduka Industries has several divisions. The Eastern Division has $350,000 of invested assets, income from operations of $200,000, and residual income of $151,000. Determine the minimum acceptable return on divisional assets.

The Creative Division of Barry Company reported the following results for December: Based on this information, what were sales?

Division G of Elephant Preservation Inc. has sales of $895,000, cost of goods sold of $475,000, operating expenses of $79,500, and invested assets of $750,000.? Calculate: (a) The return on investment for Division G. (b) The profit margin for Division G. (c) The investment turnover for Division G.

Several items are missing from the following table of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter (a-l). Round percentage values to one decimal place.

Magnolia Company's Division A has income from operations of $80,000 and assets of $400,000. The minimum acceptable return on assets is 12%. What is the residual income for the division?

Quiz 23: Decentralized Operations

The sales, income from operations, invested assets, and residual income for each division of Marcus Company are as follows:​ Determine the minimum return for invested assets.

Paduka Industries has several divisions. The Eastern Division has $350,000 of invested assets, income from operations of $200,000, and residual income of $151,000. Determine the minimum acceptable return on divisional assets.

The Creative Division of Barry Company reported the following results for December:​​ Based on this information, what were sales?

Division G of Elephant Preservation Inc. has sales of $895,000, cost of goods sold of $475,000, operating expenses of $79,500, and invested assets of $750,000.? Calculate: (a) The return on investment for Division G. (b) The profit margin for Division G. (c) The investment turnover for Division G.

Several items are missing from the following table of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter (a-l). Round percentage values to one decimal place.​

Magnolia Company's Division A has income from operations of $80,000 and assets of $400,000. The minimum acceptable return on assets is 12%. What is the residual income for the division?

The sales, income from operations, invested assets, and residual income for each division of Marcus Company are as follows: Determine the minimum return for invested assets.

The Creative Division of Barry Company reported the following results for December: Based on this information, what were sales?

Several items are missing from the following table of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter (a-l). Round percentage values to one decimal place.