Question 1

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 operating income?
c.Which division is most profitable in terms of return on investment?

Accepted Answer

The answer of Data for Divisions A, B, C, D,...

Question 2

Using the data below for Ace Guitar Company, determine the divisional operating income for the A and B regions.  Allocate support department expenses proportional to the sales of each region. Round percentage of sales allocations to one decimal place.

Accepted Answer

The answer of Using the data below for Ace Guitar...

Question 3

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

Accepted Answer

The answer of Magnolia Company's Division A has operating income...

Question 4

Match each definition that follows with the term (a-e) it defines.
-Earned by profit centers
A)Controllable revenues
B)Profit margin
C)Investment turnover
D)Return on investments (ROI)e.Residual income

Accepted Answer

The answer of Match each definition that follows with the...

Question 5

Match each definition that follows with the term (a-e) it defines.
-Operating income minus minimum acceptable operating income
A)Controllable revenues
B)Profit margin
C)Investment turnover
D)Return on investments (ROI)e.Residual income

Accepted Answer

The answer of Match each definition that follows with the...

Question 6

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 (ROI) for each division. Round the profit margin percentage to two decimal places, the investment turnover to four decimal places, and the return on investment to one decimal place.

Accepted Answer

The answer of Bentz Co. has two divisions, A and...

Question 7

Xang Company's costs were over budget by $46,000. Xang Company is divided into two regions. The first region's costs were over budget by $7,000.Determine the amount that the second region's cost was over or under budget.

Accepted Answer

The answer of Xang Company's costs were over budget by...

Question 8

Match each definition that follows with the term (a-e) it defines.
-Operating income divided by invested assets
A)Controllable revenues
B)Profit margin
C)Investment turnover
D)Return on investments (ROI)e.Residual income

Accepted Answer

The answer of Match each definition that follows with the...

Question 9

The budget for Department 6 of Cardinal Company for the current month ending March 31 is as follows:  During March, the costs incurred in Department 6 of Cardinal Company were materials, $204,000; factory wages, $285,000; supervisory salaries, $63,600; depreciation of plant and equipment, $35,000; power and light, $21,360; insurance and property taxes, $14,400; and maintenance, $9,456. 
a.Prepare a budget performance report for the supervisor of Department 6 of Cardinal Company for the month of March.
b.Are there any significant variances (5% or greater) of the budgeted amounts that should be examined by the supervisor?

Accepted Answer

The answer of The budget for Department 6 of Cardinal...

Question 10

A department store allocates payroll costs on the basis of the number of payroll checks issued. Accounting costs are allocated on the basis of the number of reports. The payroll costs for the year were $231,000, and the accounting costs for the year totaled $75,500. The departments and the number of payroll checks and accounting reports for each are as follows:  Determine the amount of (a) payroll costs and (b) accounting costs to be allocated to each department.

Accepted Answer

The answer of A department store allocates payroll costs on...

Question 11

Piano Company's costs were over budget by $47,000. Piano Company is divided into two regions. The first region's costs were over budget by $5,000. Determine the amount that the second region's cost was over or under budget.

Accepted Answer

The answer of Piano Company's costs were over budget by...

Question 12

Match each definition that follows with the term (a-e) it defines.
-Ratio of sales to invested assets
A)Controllable revenues
B)Profit margin
C)Investment turnover
D)Return on investments (ROI)e.Residual income

Accepted Answer

The answer of Match each definition that follows with the...

Question 13

Ralston Company has operating income of $75,000, invested assets of $360,000, and sales of $790,000.​
Use the DuPont formula to compute the return on investment (ROI), 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

The answer of Ralston Company has operating income of $75,000,...

Question 14

The sales, operating income, 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

The answer of The sales, operating income, and invested assets...

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 percentages to one decimal place.

Accepted Answer

The answer of Several items are missing from the following...

Question 16

Match each definition that follows with the term (a-e) it defines.
-Ratio of operating income to sales
A)Controllable revenues
B)Profit margin
C)Investment turnover
D)Return on investments (ROI)e.Residual income

Accepted Answer

The answer of Match each definition that follows with the...

Question 17

Using the data from Terrace Industries, determine the divisional operating income for Districts 1 and 2.  Allocate support department expenses proportional to the sales of each district.

Accepted Answer

The answer of Using the data from Terrace Industries, determine...

Question 18

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

Accepted Answer

The answer of The Creative Division of Barry Company reported...

Question 19

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

Accepted Answer

The answer of The sales, operating income, and invested assets...

Question 20

Using the data below for Coffee & Cocoa Company, determine the divisional operating income for the three regions by allocating the support department expenses proportional to the sales of the regions. Round final allocation amounts to the nearest whole dollar.​

Accepted Answer

The answer of Using the data below for Coffee &...

Quiz 24: Evaluating Decentralized Operations

Using the data below for Ace Guitar Company, determine the divisional operating income for the A and B regions. Allocate support department expenses proportional to the sales of each region. Round percentage of sales allocations to one decimal place.

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

Match each definition that follows with the term (a-e) it defines. -Earned by profit centers A)Controllable revenues B)Profit margin C)Investment turnover D)Return on investments (ROI)e.Residual income

Match each definition that follows with the term (a-e) it defines. -Operating income minus minimum acceptable operating income A)Controllable revenues B)Profit margin C)Investment turnover D)Return on investments (ROI)e.Residual income

Xang Company's costs were over budget by $46,000. Xang Company is divided into two regions. The first region's costs were over budget by $7,000.Determine the amount that the second region's cost was over or under budget.

Match each definition that follows with the term (a-e) it defines. -Operating income divided by invested assets A)Controllable revenues B)Profit margin C)Investment turnover D)Return on investments (ROI)e.Residual income

Piano Company's costs were over budget by $47,000. Piano Company is divided into two regions. The first region's costs were over budget by $5,000. Determine the amount that the second region's cost was over or under budget.

Match each definition that follows with the term (a-e) it defines. -Ratio of sales to invested assets A)Controllable revenues B)Profit margin C)Investment turnover D)Return on investments (ROI)e.Residual income

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 percentages to one decimal place.

Match each definition that follows with the term (a-e) it defines. -Ratio of operating income to sales A)Controllable revenues B)Profit margin C)Investment turnover D)Return on investments (ROI)e.Residual income

Using the data from Terrace Industries, determine the divisional operating income for Districts 1 and 2. Allocate support department expenses proportional to the sales of each district.

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

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

Using the data below for Coffee & Cocoa Company, determine the divisional operating income for the three regions by allocating the support department expenses proportional to the sales of the regions. Round final allocation amounts to the nearest whole dollar.​

Using the data below for Coffee & Cocoa Company, determine the divisional operating income for the three regions by allocating the support department expenses proportional to the sales of the regions. Round final allocation amounts to the nearest whole dollar.