Bag Company has the following data needed to complete the operating result for the year just ended: a. Division 1 has 40 percent variable cost ratio. b. Division 1 and Division 2 average operating assets are $200,000 and $20,000 respectively. c. Common fixed expenses total $290,000 are allocated to each division base on each division sales revenues with overall net operating income of $40,000. d. The company reported a total sale of $1,000,000 from Division 1 and Division 2. e. The company required a minimum rate of return on investment is 15% from each division. Required - complete the table below: Instruction: DO NOT put a "$" dollar sign, a "," comma sign, and "%" percent sign on your answer. Division 1 Division 2 Sales Less Variable expenses 240000 Contribution margin 320000 Less Traceable fixed expenses 150000 200000 Division segment margin 210000 120000 Less Common fixed expenses Net operating income Rate of return on investment Divisions' required return on investment

Bag Company has the following data needed to complete the operating result for the year just ended: a. Division 1 has 40 percent variable cost ratio. b. Division 1 and Division 2 average operating assets are $200,000 and $20,000 respectively. c. Common fixed expenses total $290,000 are allocated to each division base on each division sales revenues with overall net operating income of $40,000. d. The company reported a total sale of $1,000,000 from Division 1 and Division 2. e. The company required a minimum rate of return on investment is 15% from each division. Required - complete the table below: Instruction: DO NOT put a "$" dollar sign, a "," comma sign, and "%" percent sign on your answer. Division 1 Division 2 Sales Less Variable expenses 240000 Contribution margin 320000 Less Traceable fixed expenses 150000 200000 Division segment margin 210000 120000 Less Common fixed expenses Net operating income Rate of return on investment Divisions' required return on investment

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter14: Quality And Environmental Cost Management

Section: Chapter Questions

Problem 1CE: Evans Company had total sales of 3,000,000 for fiscal 20x5. The costs of quality-related activities...

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Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects to sell 28,700 units at 32 each. Kallings controller provided the following information for the coming year: Required: 1. Calculate the cost of one unit of product under absorption costing. 2. Calculate the cost of one unit of product under variable costing. 3. Calculate operating income under absorption costing for next year. 4. Calculate operating income under variable costing for next year.
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.
Evans Company had total sales of 3,000,000 for fiscal 20x5. The costs of quality-related activities are given below. Required: 1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide? 2. Prepare a bar graph and pie chart that illustrate each categorys contribution to total quality costs. Comment on the significance of the distribution. 3. What if, five years from now, quality costs are 7.5 percent of sales, with control costs being 65 percent of the total quality costs? What would your conclusion be?
During the current year, Sokowski Manufacturing earned income of $350,000 from total sales of $5,500,000 and average capital assets of $12,000,000. A. Based on this information, calculate asset turnover. B. Using the sales margin from the previous exercise, what is the total ROI for the company during the current year?
Jellison Company had the following operating data for its first two years of operations: Jellison produced 90,000 units in the first year and sold 80,000. In the second year, it produced 80,000 units and sold 90,000 units. The selling price per unit each year was 12. Jellison uses an actual costing system for product costing. Required: 1. Prepare income statements for both years using absorption costing. Has firm performance, as measured by income, improved or declined from Year 1 to Year 2? 2. Prepare income statements for both years using variable costing. Has firm performance, as measured by income, improved or declined from Year 1 to Year 2? 3. Which method do you think most accurately measures firm performance? Why?
Mitsu Division has the following results for the year: Revenues $1,080,000Variable expenses 440,000Fixed expenses 400,000Total divisional assets are $1,600,000. The company's minimum required rate of return is 14 percent. What is the residual income for Scottso?
Perry Company has three divisions: R,S, and T. Division R's income statement shows the following for the year ended December 31: Sales $1,000,000; Cost of Goods Sold $(800,000); Gross Profit $$200,000; Selling expenses $100,000; Administrative Expenses $250,000; Net Loss $(150,000) Cost of Goods sold is at 75 percent variable and 25 percent fixed. Of the fixed costs, 60 percent are avoidable if the division is closed. All of the selling expenses related to the division would be eliminated if Division R were eliminated. Of the administrative expenses, 90 percent are applied from corporate costs. If Division R were eliminated, Perry's income would: a) increase by $150,000; b) decrease by $75,000; c) decrease by $155,000; d) decrease by $215,000
Nicholas Technologies operates two divisions: Hardware Services and Software Services. During the current month, the two divisions reported the following results. Hardware Software Sales $ 660,000 $ 720,000 Variable costs (as a percentage of sales) 40 % 45 % Traceable fixed costs $ 250,000 $ 125,000 In addition, fixed costs common to both divisions amounted to $229,000. Prepare an income statement showing percentages as well as dollar amounts. Conclude your statement with income from operations for the business and with the responsibility margin for each division. (Round percentage answers to 2 decimal place. i.e. 0.1234 should be considered as 12.34%.)
Ryan Division has the following results for the year: Revenues $470,000Net income 130,000Total divisional assets are $625,000. The company's minimum required rate of return is 12 percent. What is the return on sales for Durand? Refer to Ryan Division, Residual income is?
Nicholas Technologies operates two divisions. Hardware Services and Software Services. During the current month, the two divisions reported the following results. Hardware Sales Varlable costs (as a percentage of sales) Traceable fixed costs Software $ 850, 000 45% $ 125, 000 $ 660, 000 40% $ 250,000 In addition, fixed costs common to both divisions amounted to $228,000. Prepare an income statement showing percentages as well as dollar amounts. Conclude your statement with income from operations for the business and with the responsibility margin for each division. (Round percentage answers to 2 decimal place. i.e. 0.1234 should be considered as 12.34%.) NICHOLAS TECHNOLOGIES Responsibility Income Statement For the Current Month Entire Company Hardware Servicos Division Software Services Division Percent of Sales Dollars Dollars Percent of Sales Dollars Percent of Sales
Coolbrook Company has the following information available for the past year: River Stream Division Division Sales revenue $1,200,000 900,000 $1,800,000 1,300,000 Cost of goods sold and operating expenses Net operating income $ 300,000 $ 500,000 Average invested assets $1,200,000 $1,800,000 The company's hurdle rate is 6 percent. Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. 2. Recalculate ROI and residual income for each division for each independent situation that follows: a. Operating income increases by 10 percent. b. Operating income decreases by 10 percent. c. The company invests $250,000 in each division, an amount that generates $100,000 additional income per division. d. Coolbrook changes its hurdle rate to 10 percent. Complete this question by entering your answers in the tabs below. Req 1 Reg 2A Req 28 Reg 20 Reg 2D Calculate return on investment (ROI) and residual income for each division for last year. (Enter your ROI…
Durand Division has the following results for the year: Revenues $470,000Net income 130,000Total divisional assets are $625,000. The company's minimum required rate of return is 12 percent. Residual income for Durand is?