Kalu Company, a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was available for the past year: View the information. Management has a 23% target rate of return for each division. Calculate each division's RI. Interpret your results. First, select the formula to calculate residual income (RI). Residual income Residential division's RI Professional division's RI 196000 exceeding management's expectations. O Information Net Sales Revenue Operating Income 600,000 $ 66,640 S 1.160,000 162,360 Average Total Assets 196,000 396,000 Residential S Professional
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- Zachs, a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was available for the past year: 1(Click the icon to view the information.) Calculate each division's RI. Interpret your results. First, select the formula to calculate residual income (RI). (1) – ( (2) × (3) ) = RI The residential division's RI is . The professional division's RI is . (4) exceeding management's expectations. 1: Data Table Net Sales Revenue Operating Income Average Total Assets Residential $570,000 $64,600 $190,000 Professional 1,090,000 164,000 400,000 Management has a 27% target rate of return for each division. (1) Asset turnover ratio Average total assets Net sales revenue Operating…Greenlink, Inc. produces environment-friendly construction material. The following information is available about the status and operations of the Manufacturing Division of Greenlink, which has a hurdle rate (minimum required rate of return) of 7%. Divisional identifiable average assets $ 414,459 Divisional income from operations $ 18,848 Divisional sales revenue $ 365,726 a. Compute the ROI for the Manufacturing Division. (Round your answer to 1 decimal place.) b. Break the Manufacturing Division ROI down using the DuPont formula.Founder Consulting Corporation has its headquarters in Memphis and operates from three branch offices in Nashville, Atlanta, and Louisville. Two of the company's activity cost pools are Administrative Service and Development Service. These costs are allocated to the three branch offices using an activity-based costing system. Information for next year follows: Activity Cost Pool Activity Measure Estimated Cost Administrative service % of time devoted to branch $ 1,680,000 Development service Computer time $ 630,000 Estimated branch data for next year is as follows: Time to branch Computer time Nashville 70 % 1,600,000 minutes Atlanta 20 % 1,200,000 minutes Louisville 10 % 400,000 minutes Total 100 % 3,200,000 minutes How much of the headquarters cost allocation should Nashville expect to receive next year?
- Compute the residual income for the Manufacturing Division. Greenlink, Inc. produces environment-friendly construction material. The following information is available about the status and operations of the Manufacturing Division of Greenlink, which has a hurdle rate (minimum required rate of return) of 7%. Divisional identifiable average assets $ 414,459 Divisional income from operations $ 18,848 Divisional sales revenue $ 365,726Dantrell Palmer has just been appointed manager of Kirchner Glass Products Division. He has two years to make the division profitable. If the division is still showing a loss after two years, it will be eliminated, and Dantrell will be reassigned as an assistant divisional manager in another division. The divisional income statement for the most recent year is as follows: Upon arriving at the division, Dantrell requested the following data on the divisions three products: He also gathered data on a proposed new product (Product D). If this product is added, it would displace one of the current products; the quantity that could be produced and sold would equal the quantity sold of the product it displaces, although demand limits the maximum quantity that could be sold to 20,000 units. Because of specialized production equipment, it is not possible for the new product to displace part of the production of a second product. The information on Product D is as follows: Required: 1. Prepare segmented income statements for Products A, B, and C. 2. Determine the products that Dantrell should produce for the coming year. Prepare segmented income statements that prove your combination is the best for the division. By how much will profits improve given the combination that you selected? (Hint: Your combination may include one, two, or three products.)A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
- Using the information in the previous exercises about Marleys Manufacturing, determine the operating income for department B, assuming department A sold department B 1,000 units during the month and department A reduces the selling price to the market price.Miracle Consulting Corporation has its headquarters in Chicago and operates from three branch offices in Portland, Dallas, and Miami. Two of the company's activity cost pools are General Service and Research Service. These costs are allocated to the three branch offices using an activity-based costing system. Information for next year follows: Activity Cost Pool Activity Measure Estimated Cost General service % of time devoted to branch $ 700,000 Research service Computer time $ 140,000 Estimated branch data for next year is as follows: % of time Computer time Portland 30 % 200,000 minutes Dallas 60 % 150,000 minutes Miami 10 % 50,000 minutes How much of the headquarters cost allocation should the Dallas office expect to receive next year? Multiple Choice $409,500. $472,500. $504,000. $280,000.Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices—one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company’s most recent year is given: Required: 1-a. Compute the companywide break-even point in dollar sales. 1-b. Compute the break-even point for the Chicago office and for the Minneapolis office. 1-c. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points? 2. By how much would the company’s net operating income increase if Minneapolis increased its sales by $52,500 per year? Assume no change in cost behavior patterns. 3. Assume that sales in Chicago increase by $35,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a. Prepare a new segmented…
- Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices—one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented incomestatement for the company’s most recent year is given: Required:1. Compute the companywide break-even point in dollar sales. Also, compute the break-even point for the Chicago office and for the Minneapolis office. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-evenpoints? Why?2. By how much would the company’s net operating income increase if Minneapolis increased its sales by $75,000 per year? Assume no change in cost behavior patterns.3. Refer to the original data. Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs.a. Prepare a new…Pacius Corporation is conducting a TDABC study in its Customer Service Department. The company has provided the following data to aid in that study. Pacius corporation Customer service Department Data Inputs Resource Data: Number of employees Average salary per employee Weeks of employment per year Minutes avallable per week (40 hours x 6e minutes) Practical capacity percentage 11 39,7se 50 2,400 Activity Data: Minutes per unit of the activity Processing Orders Processing Resolving Issues Credit Reviews 12 24 36 Cost object Data: Number of orders processed Number of queries resolved Number of credit reviens processed Customer S 35 18 Per TDABC, the total cost assigned to Customer S would be closest to O a $14.04. Ob. $163.80. Oc $346.32, Od $168 48.The cost of the personnel department at the Mason Company has always been charged to the production departments based upon number of employees. Recently, opinions gathered from the department managers indicated that the number of new hires might also be a predictor of personnel costs to be assigned. Total personnel department costs are $120,000. Department Department Department Cost Driver A B C Number of employees 300 250 50 The number of new hires 15 25 10 Required: Using the above data, prepare a report that contrasts the different amounts of personnel department cost that would be allocated to each of the production departments if the cost driver used is a. number of employees. b. the number of new hires. c. Which cost…