Answered: Operating income of the Pierce…

Operating income of the Pierce Automobile Division is $2,225,000. If operating income before support department allocations is $3,250,000,

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 2BE: Support department allocations The centralized computer technology department of Hardy Company has...

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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
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A division has net assets of £580,000. The profit statement for the division for the latest period is: £ Revenue 850,000 Variable costs 410,000 Contribution 440,000 Attributable fixed costs 110,000 Central fixed costs 95,000 Divisional profit 235,000 The divisional manager is considering a new project which requires an investment of £200,000 but is expected to generate a return of £18,000 per annum. The manager is assessed on his performance, not the performance of the division, using Return on Investment as a measure. Required: Advise, with supporting calculations, whether this project will be beneficial to the divisional manager. Advise with supporting calculations whether the project would be beneficial to the manager if he was assessed on the performance of the division rather than his own…