y decentralized and managers are evaluated solely on divisional performance. C ional revenue minus regional cost of sales). g information is from Lauderdale's first year of operations: Region I Region II $ 1,202,000 $1,652,000 451,000 423,000 ales Seneral and Administrative (all fixed) overhead on the division assets in the three regions of Lauderdale Corporation follows: $ 702,000 632,000 1,290,500 Corporation has a cost of capital of 8.6 percent. residual income for the three regions lapore taves Region III Tota $2,252,000 1,141,000 853,000 811,000 633,000
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- Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs, and assets in their respective regions. The firm is highly decentralized and managers are evaluated solely on divisional performance. Corporate overhead (all fixed) is allocated to the regions based on regional gross margin (regional revenue minus regional cost of sales). The following information is from Lauderdale's first year of operations: Region I Region II Region III Total Corporation Revenues $ 1,202,000 $ 1,652,000 $ 2,252,000 $ 5,106,000 Cost of sales 451,000 811,000 1,141,000 2,403,000 Selling, General and Administrative (all fixed) 423,000 633,000 853,000 1,909,000 Corporate overhead 436,000 Information on the division assets in the three regions of Lauderdale Corporation follows: Region I $ 702,000 Region II 632,000 Region III 1,290,500 Lauderdale Corporation has a cost of capital of 8.6 percent. Required: Compute…Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs, and assets in their respective regions. The firm is highly decentralized and managers are evaluated solely on divisional performance. Corporate overhead (all fixed) is allocated to the regions based on regional gross margin (regional revenue minus regional cost of sales). The following information is from Lauderdale's first year of operations: Region I Region II Region III Total Corporation Revenues $ 1,200,000 $ 1,650,000 $ 2,250,000 $ 5,100,000 Cost of sales 450,000 810,000 1,140,000 2,400,000 Selling, General and Administrative (all fixed) 420,000 630,000 850,000 1,900,000 Corporate overhead 432,000 Required: Compute divisional operating income for the three regions. Ignore taxes. How have these regions performed?Arlington Clothing, Inc., shows the following information for its two divisions for year 1. Lake Region Coastal Region Sales revenue $ 4,160,000 $ 13,070,000 Cost of sales 2,691,300 6,535,000 Allocated corporate overhead 249,600 784,200 Other general and administration 553,900 3,755,000 Required: a. Compute divisional operating income for the two divisions. Ignore taxes. b-1. What are the gross margin and operating margin percentages for both divisions? b-2. How well have these divisions performed?
- Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs, and assets in their respective regions. The firm is highly decentralized and managers are evaluated solely on divisional performance. Corporate overhead (all fixed) is allocated to the regions based on regional gross margin (regional revenue minus regional cost of sales). The following information is from Lauderdale's first year of operations: Region I Region II Region III Total Corporation Revenues $ 1,206,000 $ 1,656,000 $ 2,256,000 $ 5,118,000 Cost of sales 453,000 813,000 1,143,000 2,409,000 Selling, General and Administrative (all fixed) 429,000 639,000 859,000 1,927,000 Corporate overhead 444,000 Information on the division assets in the three regions of Lauderdale Corporation follows: Region I $ 706,000 Region II 636,000 Region III 1,296,500 Required: Compute the division ROI for each of the three regions. How have…Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs, and assets in their respective regions. The firm is highly decentralized and managers are evaluated solely on divisional performance. Corporate overhead (all fixed) is allocated to the regions based on regional gross margin (regional revenue minus regional cost of sales). The following information is from Lauderdale's first year of operations: Region I $ 1,200,000 450,000 420,000 Required A Required B Region II $ 1,650,000 810,000 630,000 Revenues Cost of sales Selling, General and Administrative (all fixed) Corporate overhead Information on the division assets in the three regions of Lauderdale Corporation follows: Region I $ 700,000 Region II Region III 630,000 1,287,500 Lauderdale Corporation has a cost of capital of 8.6 percent. Required: a. Compute residual income for the three regions. Ignore taxes. b. How have these regions performed? Complete this…Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, as profit centers. The chief executive officer (CEO) evaluates divisional performance, using operating income as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: Revenues—N Region $3,780,000 Revenues—S Region 5,673,000 Revenues—W Region 5,130,000 Operating Expenses—N Region 2,678,500 Operating Expenses—S Region 4,494,890 Operating Expenses—W Region 3,770,050 Corporate Expenses—Dispatching 182,000 Corporate Expenses—Equipment Management 1,200,000 Corporate Expenses—Treasurer's 734,000 General Corporate Officers' Salaries 1,380,000 The company operates three support departments: the Dispatching Department, the Equipment Management Department, and the Treasurer's Department. The Dispatching Department manages the scheduling and releasing of completed trains. The Equipment…
- Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: Revenues—N Region $986,900 Revenues—S Region 1,186,300 Revenues—W Region 2,027,500 Operating Expenses—N Region 625,400 Operating Expenses—S Region 706,000 Operating Expenses—W Region 1,226,100 Corporate Expenses—Dispatching 485,000 Corporate Expenses—Equipment Management 237,900 Corporate Expenses—Treasurer’s 150,100 General Corporate Officers’ Salaries 331,500 The company operates three service departments: the Dispatching Department, the Equipment Management Department, and the Treasurer’s Department. The Dispatching Department manages the scheduling and releasing of completed trains. The Equipment Management…Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: Revenues—N Region $986,900 Revenues—S Region 1,186,300 Revenues—W Region 2,027,500 Operating Expenses—N Region 625,400 Operating Expenses—S Region 706,000 Operating Expenses—W Region 1,226,100 Corporate Expenses—Dispatching 485,000 Corporate Expenses—Equipment Management 237,900 Corporate Expenses—Treasurer’s 150,100 General Corporate Officers’ Salaries 331,500 The company operates three service departments: the Dispatching Department, the Equipment Management Department, and the Treasurer’s Department. The Dispatching Department manages the scheduling and releasing of completed trains. The Equipment Management…Carry On Freight Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance using operating income as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31, 20Y3. Revenues—Air Division $ 935,800 Revenues—Rail Division 1,110,300 Revenues—Truck Division 2,025,500 Operating Expenses—Air Division 593,000 Operating Expenses—Rail Division 660,800 Operating Expenses—Truck Division 1,224,900 Corporate Expenses—Shareholder Relations 142,300 Corporate Expenses—Customer Support 517,500 Corporate Expenses—Legal 180,000 General Corporate Officers' Salaries 314,300 The company operates three service departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Customer Support Department is the company's point of contact for…
- Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, as profit centers. The chief executive officer (CEO) evaluates divisional performance using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: Revenues—N Region $1,057,300 Revenues—S Region 1,215,200 Revenues—W Region 2,257,000 Operating Expenses—N Region 670,000 Operating Expenses—S Region 723,200 Operating Expenses—W Region 1,364,900 Corporate Expenses—Dispatching 623,500 Corporate Expenses—Equipment Management 152,000 Corporate Expenses—Treasurer’s 160,800 General Corporate Officers’ Salaries 355,100 The company operates three service departments: the Dispatching Department, the Equipment Management Department, and the Treasurer’s Department. The Treasurer’s Department and general corporate officers’ salaries are not controllable by division management.…Red Line Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: Revenues—East $866,000 Revenues—West 1,030,000 Revenues—Central 1,890,000 Operating Expenses—East 565,700 Operating Expenses—West 627,360 Operating Expenses—Central 1,170,060 Corporate Expenses—Shareholder Relations 156,000 Corporate Expenses—Customer Support 320,000 Corporate Expenses—Legal 255,200 General Corporate Officers’ Salaries 273,500 The company operates three service departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Shareholder Relations Department and general corporate officers’ salaries are not controllable by division…Red Line Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: Revenues—East $ 862,000 Revenues—West 1,036,000 Revenues—Central 1,890,000 Operating Expenses—East 563,600 Operating Expenses—West 621,840 Operating Expenses—Central 1,167,900 Corporate Expenses—Shareholder Relations 150,000 Corporate Expenses—Customer Support 360,000 Corporate Expenses—Legal 252,000 General Corporate Officers’ Salaries 274,500 The company operates three service departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Customer Support Department is the company’s point of contact for new service, complaints, and requests for…