Household Brands Incorporated (HBI) manufactures household goods in the United States. The company made two acquisitions in previous years to diversify their product lines. In 2011, HBI acquired cosmetics and consumer electronics companies. HBI is now, in 2022, comprised of three divisions: cosmetics, household, and consumer electronics. The following information (in thousands of dollars) presents operating revenues, operating income, and invested assets of the company over the last three years: Revenue Operating Income Assets Cosmetics 2020 $ 24,500 $ 2,300 $ 10,000 2021 22,500 1,900 10,000 2022 19,600 1,800 9,500 Household 2020 17,400 1,300 7,500 2021 15,300 1,100 8,000 2022 12,500 900 6,500 Electronics 2020 13,500 1,500 4,500 2021 9,500 1,100 4,500 2022 8,700 1,050 4,300 Household Brands Total 2020 55,400 5,100 22,000 2021 47,300 4,100 22,500 2022 40,800 3,750 20,300 The current compensation package is an annual bonus award. The senior executives share in the bonus pool. The pool is calculated as 20% of the annual residual income of the company. The residual income is defined as operating income minus a cost of capital charge of 15% of invested assets. The total amount of the bonus pool for 2020 is: Multiple Choice $218,000. $141,000. $174,000. $360,000.
Household Brands Incorporated (HBI) manufactures household goods in the United States. The company made two acquisitions in previous years to diversify their product lines. In 2011, HBI acquired cosmetics and consumer electronics companies. HBI is now, in 2022, comprised of three divisions: cosmetics, household, and consumer electronics. The following information (in thousands of dollars) presents operating revenues, operating income, and invested assets of the company over the last three years: Revenue Operating Income Assets Cosmetics 2020 $ 24,500 $ 2,300 $ 10,000 2021 22,500 1,900 10,000 2022 19,600 1,800 9,500 Household 2020 17,400 1,300 7,500 2021 15,300 1,100 8,000 2022 12,500 900 6,500 Electronics 2020 13,500 1,500 4,500 2021 9,500 1,100 4,500 2022 8,700 1,050 4,300 Household Brands Total 2020 55,400 5,100 22,000 2021 47,300 4,100 22,500 2022 40,800 3,750 20,300 The current compensation package is an annual bonus award. The senior executives share in the bonus pool. The pool is calculated as 20% of the annual residual income of the company. The residual income is defined as operating income minus a cost of capital charge of 15% of invested assets. The total amount of the bonus pool for 2020 is: Multiple Choice $218,000. $141,000. $174,000. $360,000.
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter10: Liabilities: Current, Installment Notes, And Contingencies
Section: Chapter Questions
Problem 4MAD: Neiman Marcus Group (NMG) is one of the largest luxury fashion retailers in the world. Kohls...
Related questions
Question
Household Brands Incorporated (HBI) manufactures household goods in the United States. The company made two acquisitions in previous years to diversify their product lines. In 2011, HBI acquired cosmetics and consumer electronics companies. HBI is now, in 2022, comprised of three divisions: cosmetics, household, and consumer electronics. The following information (in thousands of dollars) presents operating revenues, operating income, and invested assets of the company over the last three years:
| Revenue | Operating Income | Assets | |
|---|---|---|---|
| Cosmetics | |||
| 2020 | $ 24,500 | $ 2,300 | $ 10,000 |
| 2021 | 22,500 | 1,900 | 10,000 |
| 2022 | 19,600 | 1,800 | 9,500 |
| Household | |||
| 2020 | 17,400 | 1,300 | 7,500 |
| 2021 | 15,300 | 1,100 | 8,000 |
| 2022 | 12,500 | 900 | 6,500 |
| Electronics | |||
| 2020 | 13,500 | 1,500 | 4,500 |
| 2021 | 9,500 | 1,100 | 4,500 |
| 2022 | 8,700 | 1,050 | 4,300 |
| Household Brands Total | |||
| 2020 | 55,400 | 5,100 | 22,000 |
| 2021 | 47,300 | 4,100 | 22,500 |
| 2022 | 40,800 | 3,750 | 20,300 |
The current compensation package is an annual bonus award. The senior executives share in the bonus pool. The pool is calculated as 20% of the annual residual income of the company. The residual income is defined as operating income minus a cost of capital charge of 15% of invested assets.
The total amount of the bonus pool for 2020 is:
Multiple Choice
-
$218,000.
-
$141,000.
-
$174,000.
-
$360,000.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub