Division A of Kern Co. has sales of $350,000, cost of goods sold for $200,000, operating expenses of $30,000, and invested assets of $600,000. What is the return on investment for Division A?
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Q4. Division A of Kern Co. has sales of $350,000, cost of goods sold for $200,000, operating expenses of $30,000, and invested assets of $600,000. What is the
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- 1. Roy Toy, a division of Fun Corp. has a net operating income of $60000 and average operating assets of $300000. The required rate of return for the company is 15%. What is the division's residual income? a. $240000 b. $45000 c. $15000 d. $51000 2. If the manager of Roy To division is evaluated based on residual income, will she want to make an investment of $100000 that would generate an additional net operating income of $18000 per year?a. Yesb. NoQ1. Division M of Mother Earth Co. has a return on investment of 24% and an investment turnover of 1.6. What is the profit margin? Answer: __________%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).
- Deuk Seon have the following investment centers. Several items are missing from the following table of rate of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter. Department Invested Assets Income from Operations Rate of Return on Investment Min. Rate of Return Min. Amt. of Income from Operations Residual Income Taek (a) (b) (c) 16% P128,000 P10,000 Jung Hwan P850,000 P153,000 (d) 12% (e) (f) Sun woo P825,000 (g) 20% (h) (i) P24,000 Dong Ryong (j) P129,000 24% (k) P60,000 (l) (a) Determine the missing items, identifying each by number. (b) Which division is most profitable in terms of income from operations? (c) Which division is most profitable in terms of rate of return on investment?B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. Round your percentage answers to one decimal place. Profit margin Return on investment Residual income 2.20 a ✓ % 4.2 ✓ % C. Which of the following statements is correct? Uncontrollable costs are included in the income statement because a. these costs ultimately affect each division. b. these costs are the responsibility of each division manager. c. these costs are non-recurring. d. these costs are head office's responsibility.Fill in the blanks in the schedule below for two separate Investment centers A and B. Note: Round your final answers to 1 decimal place. Investment Center B A Sales $ 10,400,000 Income $ 240,000 Average assets $ 1,200,000 Profit margin 8.0% Investment turnover Return on investment 20 12.0%
- Shalom Company provided you the following data: Net operating income Total liabilities Contribution margin Average operating assets Sales 150,000 350,000 400,000 750,000 800,000 What is the return on investment?Megamart provides the following information on its two investment centers. Investment Center Electronics Sporting goods Sales $ 63,460,000 19,050,000 Income $ 3,173,000 2,286,000 Average Assets $ 16,700,000 12,700,000 Exercise 22-10 (Algo) Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 12% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Electronics center is presented with a new investment opportunity that will yield a 14% return on investment. Should the new investment opportunity be accepted? The target return is 12%.Golden Goodness (GG) has an investment center that had the following data: Operating Income $28,000 Sales $350,000 Invested assets $175,000 PMB has set a minimum acceptable rate of return at 14%. Using the information, answer the following questions. You must include what type of number it is (%, $, etc.) Part A: What is the residual income? Part B: Show calcualtions on how you got answer
- The management of Ramir Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called BROCO, is a component of the company's finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2022. 1. 8,000 units of BROCO were produced in the Production Department. 2. Variable manufacturing costs applicable to the production of each BROCO unit were: direct materials $4.80, direct labor $4.30, indirect labor $0.43, utilities $0.40. Fixed manufacturing costs applicable to the production of BROCO were: 3. Cost Item Depreciation Property taxes Insurance Direct $2,100 Instructions 500 900 $3.500 Allocated $ 900 200 600 $1,700 Total $3,000 700 1,500 $5.200 All variable manufacturing and direct fixed costs will be eliminated if BROCO is purchased. Allocated costs will not be eliminated if BROCO is purchased. So if BROCO is purchased, the fixed…Required Information [The following Information applies to the questions displayed below.] Megamart provides the following Information on its two Investment centers. Investment Center Electronics Sporting goods Sales $ 63,460,000 19,050,000 1. Compute return on Investment for each center. Using return on investment, which center is most efficient at using assets to generate Income? 2. Assume a target Income of 12% of average assets. Compute residual income for each center. Which center generated the most residual Income? 3. Assume the Electronics center is presented with a new Investment opportunity that will yield a 14% return on Investment. Should the new Investment opportunity be accepted? The target return is 12%. Complete this question by entering your answers in the tabs below. Numerator: Required 1 Required 2 Required 3 Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? Income $ 3,173,000…Use the following information to answer the questions. Company X $ 12,480,000 $ 3,120,000 561,600 8.00% Company Y $ 28,480,000 $ 7,120,000 2$ Company Z $ 20,480,000 $ 5,120,000 532,480 Sales Average operating assets Net operating income Minimum required rate of return $ 512,640 8.50% 10.40% Required: 1. Compute the return on investment (ROI) for each company using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each company. 3. Each company is presented with an investment opportunity that would yield a 9% rate of return. a. Assume performance is measured based on ROI. Indicate whether each company will likely accept or reject the investment opportunity. b. Assume performance is measured based on residual income. Indicate whether each company will likely accept or reject the investment opportunity. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req ЗA Req 3B Each company is presented with an investment…