Hyms Division of ASOP’s Company’s operating results include: controllable margin, P200,000; sales P2,200,000; and operating assets, P800,000. The Hyms Division’s ROI is 25%. Management is considering a project with sales of P100,000, variable expenses of P60,000, fixed costs of P40,000; and an asset investment of P150,000. Should management accept this new project? a. No, since ROI will be lowered. b. Yes, since ROI will increase. c. Yes, since additional sales always mean more customers. d. No, since a loss will be incurred.
Hyms Division of ASOP’s Company’s operating results include: controllable margin, P200,000; sales P2,200,000; and operating assets, P800,000. The Hyms Division’s ROI is 25%. Management is considering a project with sales of P100,000, variable expenses of P60,000, fixed costs of P40,000; and an asset investment of P150,000. Should management accept this new project? a. No, since ROI will be lowered. b. Yes, since ROI will increase. c. Yes, since additional sales always mean more customers. d. No, since a loss will be incurred.
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 13E: The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as...
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Hyms Division of ASOP’s Company’s operating results include: controllable margin, P200,000; sales P2,200,000; and operating assets, P800,000. The Hyms Division’s ROI is 25%. Management is considering a project with sales of P100,000, variable expenses of P60,000, fixed costs of P40,000; and an asset investment of P150,000. Should management accept this new project?
a. No, since ROI will be lowered.
b. Yes, since ROI will increase.
c. Yes, since additional sales always mean more customers.
d. No, since a loss will be incurred.
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