The Medford Burkett Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes Taxis and Limos. Segment performance is measured using a system of responsibility reports and return on investment calculations. The allocation of resources within the company and the segment managers' bonuses are based in part on the results shown in these reports.
Recently the company was the victim of a computer virus that deleted portions of the company's accounting records. This was discovered when the current period's responsibility reports were being prepared. The printout of the actual operating results appeared as follows. $$\begin{array} { l c c c c }
& \text { Planes } & \text { Taxis } & \text { Limos } \
\text { Service revenue } &\$ ? & \$ 450,000 & \$ ? \
\text { Variable costs } & 5,000,000 & ? & 320,000 \
\text { Contribution margin } & ? & 180,000 & 380,000 \
\text { Controllable fixed costs } & 1,500,000 & ? & ? \
\text { Controllable margin } & ? & 70,000 & 176,000 \
\text { Average operating assets } & 25,000,000 & ? & 1,600,000 \
\text { Return on investment } & 12 \% & 10 \% & ?
\end{array}$$ Instructions
Determine the missing pieces of information above.

Question

The Medford Burkett Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes Taxis and Limos. Segment performance is measured using a system of responsibility reports and return on investment calculations. The allocation of resources within the company and the segment managers' bonuses are based in part on the results shown in these reports.
Recently the company was the victim of a computer virus that deleted portions of the company's accounting records. This was discovered when the current period's responsibility reports were being prepared. The printout of the actual operating results appeared as follows. $$\begin{array} { l c c c c } 
& \text { Planes } & \text { Taxis } & \text { Limos } \
\text { Service revenue } &\$ ? & \$ 450,000 & \$ ? \
\text { Variable costs } & 5,000,000 &  ? & 320,000 \
\text { Contribution margin } & ? &  180,000 & 380,000 \
\text { Controllable fixed costs } & 1,500,000 & ? & ? \
\text { Controllable margin } & ? & 70,000 & 176,000 \
\text { Average operating assets } & 25,000,000 & ? & 1,600,000 \
\text { Return on investment } & 12 \% & 10 \% & ?
\end{array}$$ Instructions
Determine the missing pieces of information above.

Quizplus · Accepted Answer

The Answer of The Medford Burkett Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes Taxis and Limos. Segment performance is measured using a system of responsibility reports and return on investment calculations. The allocation of resources within the company and the segment managers' bonuses are based in part on the results shown in these reports.
Recently the company was the victim of a computer virus that deleted portions of the company's accounting records. This was discovered when the current period's responsibility reports were being prepared. The printout of the actual operating results appeared as follows. $$\begin{array} { l c c c c } 
& \text { Planes } & \text { Taxis } & \text { Limos } \
\text { Service revenue } &\$ ? & \$ 450,000 & \$ ? \
\text { Variable costs } & 5,000,000 &  ? & 320,000 \
\text { Contribution margin } & ? &  180,000 & 380,000 \
\text { Controllable fixed costs } & 1,500,000 & ? & ? \
\text { Controllable margin } & ? & 70,000 & 176,000 \
\text { Average operating assets } & 25,000,000 & ? & 1,600,000 \
\text { Return on investment } & 12 \% & 10 \% & ?
\end{array}$$ Instructions
Determine the missing pieces of information above.

The Medford Burkett Company Uses a Responsibility Reporting System to Measure