Presented below is information related to the Southern Division of Lumber, Inc. Contribution margin $1,211,900 Controllable margin $895,180 Average operating assets $4,069,000 Minimum rate of return 18 % Compute the Southern Division's return on investment and residual income. Return on investment Residual income $ %24
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- Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%Residual income The Commercial Division of Galena Company has operating income of 12,680,000 and assets of 74,500,000. The minimum acceptable return on assets is 12%. What is the residual income for the division?Presented below is information related to the Hokie Division of Lumber, Inc. Contribution margin $1,200,900 Controllable margin $895,180 Average operating assets $4,069,000 Minimum rate of return 15 Compute the Hokie Division's return on investment. 12% 28% 15% 22%
- Presented below is information related to the Southern Division of Lumber, Inc. Contribution margin$1,235,600Controllable margin$931,270Average operating assets$4,049,000Minimum rate of return16% Compute the Southern Division’s return on investment and residual income. Return on investment%Residual income$Required information Use the following information for the Problems below: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate o on invested capital is 8 percent. Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Division A ? $ 440,000 ? 40% 2 ? ? Division A $ 8,150,000 $ 1,630,000 $ 8,150,000 20 % 1.00 $ 978,000 20% Required: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return capital is 8 percent. Note: Round "Capital turnover" answers to 2 decimal places. $ $ $ Division B $ 10,000,000 $ 2,160,000 $ 2,600,000 $ Division B 40,300,000 8,866,000 10,075,000 22 % 4.00 88 % ? ? ? 8,060,000 Division C ? $ ? ? 45% ? 40% $ 139,000 Division C 25 % 20 % 471,000Presented below is information related to the Annandale Division of Lumber, Inc. Contribution margin $1,211,900 Controllable margin $895,180 Average operating assets $4,069,000 Minimum rate of return 15 Compute the Annandale Division's residual income. $284,830 895,180 $150,000 $162,760
- Selected data from an investment center of IROL Inc. follow:Sales $8,000,000Net book value of assets, beginning 2,500,000Net book value of assets, ending 2,600,000Net operating income 640,000Minimum rate of return 12%Required1. Calculate return on sales (ROS), asset turnover (AT), and return on investment (ROI).2. Calculate residual income (RI).The following data relate to the Motor Division of Young Company:Sales P10,000,000Variable costs 3,000,000Direct fixed costs 5,000,000Invested capital 8,000,000Allocated actual interest costs 800,000Capital charge 12%Question: What is the divisional return on investment?Part I (1) What is residual income and how is it calculated? (2) Please use the information below to calculate the residual income for Divisions A and B, assuming that the company’s minimum rate of return is 15 percent. Income Invested Sales from Operations Assets Division A $500,000 $ 90,000 $400,000 Division B 800,000 144,000 600,000
- Kyle Corporation provides the following information for the Product Division and Service Division for the year. Product Division Service Division 420,000 $ 650,000 195,000 245,000 640,000 610,000 14.0% 14.0% Net sales Operating income Average total assets Target rate of return $ Requirement 1. Calculate the return on investment for each division. (Enter answers as a percent rounded to the nearest hundredth percent, X.XX%) The return on investment for the Product Division is The return on investment for the Service Division is Requirement 2. Which division has the highest ROI? % % Requirement 3. Calculate the residual income for each division. (Round answers to the nearest whole dollar.) The residual income for the Product Division is The residual income for the Service Division is Requirement 4. Which division has the highest residual income?DATA FOR TOWER HILL DIVISION Revenue 10, 000Fixed Asset:Purchases by division 500Purchases by Head Office 2,500Direct Material and Labour Costs (variable) 6,000Indirect Labour (Consolidate fixed overhead) 1000Divisional Manager’s Salary 400Apportioned Head Office Costs 600Depreciation on fixed assets 20%Company’s cost of capital 10%Assuming that fixed assets comprise the total investment in Tower Hill Division. You are required to determine the following:(i). Variables(ii). Controllable profit (iii). Direct profit (iv). Controllable residual profit (v). Net residual profitKnowledge Check East Division of Blue Spruce Anchors provided the following information: Contribution margin Controllable margin Average operating assets Minimum rate of return Return on investment $890,000 $395,900 $2,140,000 Compute the return on investment and the residual income. (Round return on investment answer to two decimal places (e.g., 15.25%).) Residual income 9 % %