Calculate the residual income with the following data: Controllable margin $202,596 Minimum Rate of Return 11% Average Operating Assets $3,092,235 Round to the nearest whole dollar, no decimal places. Note: Controllable margin is the same as net income for a segment with control over the costs. Minimum rate of return is the same as the cost of capital.

Calculate the residual income with the following data: Controllable margin $202,596 Minimum Rate of Return 11% Average Operating Assets $3,092,235 Round to the nearest whole dollar, no decimal places. Note: Controllable margin is the same as net income for a segment with control over the costs. Minimum rate of return is the same as the cost of capital.

Managerial Accounting

15th Edition

ISBN:9781337912020

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

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

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 16E

See similar textbooks

Similar questions

Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: At the beginning of last year, Elway had 28,300,000 in operating assets. At the end of the year, Elway had 23,700,000 in operating assets. Required: 1. Compute average operating assets. 2. Compute the margin and turnover ratios for last year. (Note: Round the answer for margin ratio to two decimal places.) 3. Compute ROI. (Note: Round answer to two decimal places.) 4. CONCEPTUAL CONNECTION Briefly explain the meaning of ROI. 5. CONCEPTUAL CONNECTION Comment on why the ROI for Elway Company is relatively high (as compared to the lower ROI of a typical manufacturing company).
If sales and average operating assets for Year 2 are identical to their values in Year 1, yet operating income is higher, Year 2 return on investment (compared with Year 1 ROI) will a. decrease b. increase c. stay the same d. cannot be determined from the above information
Using the following data, estimate the new Return on Investment if there is a 13% decrease in the average operating assets - with the new average operating assets as the base. Sales $3,516,519 Contribution margin 39% Controllable fixed costs 300,215 Average operating assets $4,964,961 Round to two decimal places. Be sure to enter the answer as a percentage but do not include the % sign.
Using the following data, estimate the new Return on Investment if there is a 6% increase in sales - with average operating assets as the base. Sales $2,640,795 Contribution margin 38% Controllable fixed costs 248,297 Average operating assets $4,486,486 Round to two decimal places. Be sure to enter the answer as a percentage but do not include the % sign.
Using the following data, estimate the new Return on Investment if there is a 9% decrease in variable and fixed costs- with average operating assets as the base. Sales $3,023,201 Contribution margin 37% Controllable fixed costs 244,010 Average operating assets $5,136,160 Round to two decimal places. Be sure to enter the answer as a percentage but do not include the % sign.
U.S. Steal has the following income statement data: UnitsSold TotalVariableCosts FixedCosts TotalCosts TotalRevenue OperatingIncome(Loss) 100,000 $ 300,000 $ 90,000 $ 390,000 $ 600,000 $ 210,000 120,000 360,000 90,000 450,000 720,000 270,000 The top row of the table has the beginning values and the bottom row of the table has the ending values. a. Compute the degree of operating leverage (DOL) based on the formula below. (Do not round intermediate calculations. Round your final answer to 2 decimal places. Calculate Degree of Operating levarege? b. Recompute DOL using the formula given below. There may be a slight difference due to rounding. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Calculate Degree of Operating levarege?
If net operating income is $80,000, average operating assets are $640,000, and the minimum required rate of return is 11%, what is the residual income? Multiple Choice $89,600 $60,800 $9,600 $70,400
Data are as follows: Average total assets is 8,000,000; Sales is 12,000,000; Variable cost is 8,000,000 and Fixed cost-controllable is 1,000,000, while common cost is 1,000,000. What is the residual income if Cost of capital is 12% (in order to properly measure the performance of the segment’s manager)? • 1,040,000 • 2,000,000 • 3,040,000 • 1,550,000 • None of the above
In 19A, the grant Company had sales of $19,950,000 with $11,571,000 variable and $7,623,000 fixed costs. 19B sales are expected to increase by 15% and cost relationship is expected to remain constant. Compute the expected operating income/(loss) of Company if sales increase by 20% in 19B. Also, Compute the expected operating income/(loss) of Company if sales decrease by 15% in 19B.
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
f net profit of the firm is OMR 280,000 and capital employed is OMR 1,400, 000 the return on capital employed will be 20%. During inflation with net profit calculated with replacement cost is OMR 180,000 and capital employed is OMR 22,00,000 the return on capital employed will be 8.2%. This situation expresses the following problem. a. Under historical cost accounting, the profits are overstated, and fixed assets are understated specially when there is increase in the price of the old fixed assets. b. Under historical cost accounting, return on capital employed which is very useful for the valuation of the business by its owners, creditors and management will not be correct and may lead to misleading decision c. Both the given statements are true in the given situation d. Both the given statements are false in the given situation
Alexander Inc. makes basketballs. The results for the year were as follows: Basketballs Sales $450,000 Income $72,000 Asset base $300,000 Weighted average cost of capital 15% Required:Compute the following amounts for the company:SHOW ALL CALCULATIONS. ROUND EACH NUMBER TO TWO (2) DECIMAL PLACES. A. Return on investment (ROI). B. Residual income if the desired rate of return is 20%. C. EVA. D. Turnover. E. Margin.