Presented below is information related to the Southern Division of Lumber, Inc. Contribution margin$1,235,600 Controllable margin$931,270 Average operating assets$4,049,000 Minimum rate of return16% Compute the Southern Division’s return on investment and residual income. Return on investment % Residual income $

Presented below is information related to the Southern Division of Lumber, Inc. Contribution margin$1,235,600 Controllable margin$931,270 Average operating assets$4,049,000 Minimum rate of return16% Compute the Southern Division’s return on investment and residual income. Return on investment % Residual income $

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter14: Decentralized Operations

Section: Chapter Questions

Problem 3SEQ: Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of...

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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
Presented 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 $162,760
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The following data relate to the Motor Division of Young Company:Sales P10,000,000Variable costs 3,000,000Direct fixed costs 5,000,000Invested capital 8,000,000Allocated actual interest costs 800,000Capital charge 12%Question: What is the divisional return on investment?
(J) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division ADivision BDivision CSales$ 12,120,000$ 28,120,000$ 20,120,000Average operating assets$ 3,030,000$ 7,030,000$ 5,030,000Net operating income$ 496,920$ 449,920$ 503,000Minimum required rate of return7.00%7.50%10.00%Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 8% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity
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