Bentz Co. has two divisions, A and B. Invested assets and condensed income statement data for each division for the year ended December 31 are as follows: Division A Division B Revenues $190,000 $125,500 Operating expenses 112,500 92,750 Support department allocations 29,500 12,625 Invested assets 225,000 99,000 a. Prepare condensed income statements for the past year for each division. Deferred expense Invested assets Operating income before support department allocations Revenues Support department allocations Bentz Co. Divisional Income Statements For the Year Ended December 31 Division A Division B $fill in the blank 9c7615fbffbd07a_2 $fill in the blank 9c7615fbffbd07a_3 fill in the blank 9c7615fbffbd07a_5 fill in the blank 9c7615fbffbd07a_6 $fill in the blank 9c7615fbffbd07a_8 $fill in the blank 9c7615fbffbd07a_9 fill in the blank 9c7615fbffbd07a_11 fill in the blank 9c7615fbffbd07a_12 Operating income $fill in the blank 9c7615fbffbd07a_13 $fill in the blank 9c7615fbffbd07a_14 b. Using the DuPont formula, determine the profit margin, investment turnover, and return on investment (ROI) for each division. Round the profit margin percentage to two decimal places, the investment turnover to four decimal places, and the return on investment to one decimal place. Division A Division B Profit margin fill in the blank 92af35ff7f9ffab_1 % fill in the blank 92af35ff7f9ffab_2 % Investment turnover fill in the blank 92af35ff7f9ffab_3 fill in the blank 92af35ff7f9ffab_4 Rate of return on investment fill in the blank 92af35ff7f9ffab_5 % fill in the blank 92af35ff7f9ffab_6 %

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 7E: Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments,...

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Question

Bentz Co. has two divisions, A and B. Invested assets and condensed income statement data for each division for the year ended December 31 are as follows:

	Division A	Division B
Revenues	$190,000	$125,500
Operating expenses	112,500	92,750
Support department allocations	29,500	12,625
Invested assets	225,000	99,000

a. Prepare condensed income statements for the past year for each division.

Deferred expense
Invested assets
Operating income before support department allocations
Revenues
Support department allocations

Bentz Co.
Divisional Income Statements
For the Year Ended December 31
	Division A	Division B
	$fill in the blank 9c7615fbffbd07a_2	$fill in the blank 9c7615fbffbd07a_3
	fill in the blank 9c7615fbffbd07a_5	fill in the blank 9c7615fbffbd07a_6
	$fill in the blank 9c7615fbffbd07a_8	$fill in the blank 9c7615fbffbd07a_9
	fill in the blank 9c7615fbffbd07a_11	fill in the blank 9c7615fbffbd07a_12
Operating income	$fill in the blank 9c7615fbffbd07a_13	$fill in the blank 9c7615fbffbd07a_14

b. Using the DuPont formula, determine the profit margin, investment turnover, and return on investment (ROI) for each division. Round the profit margin percentage to two decimal places, the investment turnover to four decimal places, and the return on investment to one decimal place.

	Division A		Division B
Profit margin	fill in the blank 92af35ff7f9ffab_1	%	fill in the blank 92af35ff7f9ffab_2	%
Investment turnover	fill in the blank 92af35ff7f9ffab_3		fill in the blank 92af35ff7f9ffab_4
Rate of return on investment	fill in the blank 92af35ff7f9ffab_5	%	fill in the blank 92af35ff7f9ffab_6	%

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