Multinational performance measurement, ROI, RI. The Seaside Corporation manufactures similar products in the United States and Norway. The U.S. and Norwegian operations are organized as decentral- ized divisions. The following information is available for 2017; ROI is calculated as operating income divided by total assets: U.S. Division Norwegian Division 6,840,000 kroner Operating income Total assets ? $7,700,000 15.00% 72,000,000 kroner ROI ? Both investments were made on December 31, 2016. The exchange rate at the time of Seaside's investment in Norway on December 31, 2016, was 9 kroner = $1. During 2017, the Norwegian kroner decreased steadily in value so that the exchange rate on December 31, 2017, is 10 kroner ing 2017 is [(9 + 10) + 2] = 9.5 kroner = $1. $1. The average exchange rate dur- |3D

Multinational performance measurement, ROI, RI. The Seaside Corporation manufactures similar products in the United States and Norway. The U.S. and Norwegian operations are organized as decentral- ized divisions. The following information is available for 2017; ROI is calculated as operating income divided by total assets: U.S. Division Norwegian Division 6,840,000 kroner Operating income Total assets ? $7,700,000 15.00% 72,000,000 kroner ROI ? Both investments were made on December 31, 2016. The exchange rate at the time of Seaside's investment in Norway on December 31, 2016, was 9 kroner = $1. During 2017, the Norwegian kroner decreased steadily in value so that the exchange rate on December 31, 2017, is 10 kroner ing 2017 is [(9 + 10) + 2] = 9.5 kroner = $1. $1. The average exchange rate dur- |3D

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 16E: A multinational corporation has a number of divisions, two of which are the North American Division...

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A multinational corporation has a number of divisions, two of which are the North American Division and the Pacific Rim Division. Data on the two divisions are as follows: Round all rates of return to four significant digits. Required: 1. Compute residual income for each division. By comparing residual income, is it possible to make a useful comparison of divisional performance? Explain. 2. Compute the residual rate of return by dividing the residual income by the average operating assets. Is it possible now to say that one division outperformed the other? Explain. 3. Compute the return on investment for each division. Can we make meaningful comparisons of divisional performance? Explain. 4. Add the residual rate of return computed in Requirement 2 to the required rate of return. Compare these rates with the ROI computed in Requirement 3. Will this relationship always be the same?
Multinational performance measurement, ROI, RI. The Seaside Corporation manufactures similar products in the United States and Norway. The U.S. and Norwegian operations are organized as decentralized divisions. The followinginformation is available for 2017; ROI is calculated as operating income divided by total assets:
A U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results: U.S. LDCSales (units) 100,000 20,000Labor (hours) 20,000 15,000Raw materials (currency) $20,000 FC 20,000Capital equipment (hours) 60,000 5,000a. a. Calculate partial labor and capital productivity i gures for the parent and subsidiary. Do the results seem confusing?b. Compute the multifactor productivity i gures for labor and capital…
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