evenue 10, 000 Fixed Asset: Purchases by division 500 Purchases by Head Office 2,500 Direct Material and Labour Costs (variable) 6,000 Indirect Labour (Consolidate fixed overhead) 1000 Divisional Manager’s Salary 400 Apportioned Head Office Costs 600 Depreciation on fixed assets 20% Company’s cost of capital 10% Assuming that fixed assets comprise the total investment in Tower Hill Division. You are required to determine the following: (i). Variables (ii). Controllable profit (iii). Direct profit (iv). Controllable residual profit (v). Net residual profit
evenue 10, 000 Fixed Asset: Purchases by division 500 Purchases by Head Office 2,500 Direct Material and Labour Costs (variable) 6,000 Indirect Labour (Consolidate fixed overhead) 1000 Divisional Manager’s Salary 400 Apportioned Head Office Costs 600 Depreciation on fixed assets 20% Company’s cost of capital 10% Assuming that fixed assets comprise the total investment in Tower Hill Division. You are required to determine the following: (i). Variables (ii). Controllable profit (iii). Direct profit (iv). Controllable residual profit (v). Net residual profit
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 14.5.3P
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Question
DATA FOR TOWER HILL DIVISION
Revenue 10, 000
Fixed Asset:
Purchases by division 500
Purchases by Head Office 2,500
Direct Material and Labour Costs (variable) 6,000
Indirect Labour (Consolidate fixed overhead) 1000
Divisional Manager’s Salary 400
Apportioned Head Office Costs 600
Depreciation on fixed assets 20%
Company’s cost of capital 10%
Assuming that fixed assets comprise the total investment in Tower Hill
Division. You are required to determine the following:
(i). Variables
(ii). Controllable profit
(iii). Direct profit
(iv). Controllable residual profit
(v). Net residual profit
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