Required information[The following information applies to the questions displayed below.]ACME Food Manufacturing reports the following for two of its divisions for a recent year.($ millions)BeverageDivisionCheeseDivisionInvested assets, beginningInvested assets, ending$2,6752,5992,687$4,4684,4063,931SalesOperating income355640Assume that each of the company's divisions has a required rate of return of 8%. Compute residual income for each division. (Enteryour answers in millions.)($ millions)BeverageCheeseTargeted returnTarget incomeResidual IncomeBeverageCheeseResidual income

Residual Income: It is the income earned above the minimum required rate of return or above the…

Required information [The following information applies to the questions displayed below.] ACME Food Manufacturing reports the following for two its divisions for a recent year. ($ millions) Beverage Division Cheese Division Invested assets, beginning Invested assets, ending Sales $2,675 $4,468 4,406 3,931 2,599 2,687 Operating income 355 640 sume that each of the company's divisions has a required rate of return of 8%. Compute residual income for each division. (Enter ur answers in millions.) millions) Beverage Cheese Targeted return

Required information [The following information applies to the questions displayed below.] ACME Food Manufacturing reports the following for two its divisions for a recent year. ($ millions) Beverage Division Cheese Division Invested assets, beginning Invested assets, ending Sales $2,675 $4,468 4,406 3,931 2,599 2,687 Operating income 355 640 sume that each of the company's divisions has a required rate of return of 8%. Compute residual income for each division. (Enter ur answers in millions.) millions) Beverage Cheese Targeted return

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 1MAD

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Profit center responsibility reporting On-Demand Sports Co. operates two divisions—the Action Sports Division and the Team Sports Division. The following income and expense accounts were provided as of November 30. 20Y1, the end of the current fiscal year, after all adjustments, including those for inventories, were recorded The bases to be used in allocating expenses, together with other essential information, are as follows a.Advertising expense—incurred al headquarters, charged back to divisions on the basis of usage: Action Sports Division. $1,200,000; Team Sports Division, $1,800,000. b. Transportation expense—charged hack lo divisions at a charge rale of $18.50 per bill of lading: Action Sports Division, 14.000 bills of lading; Team Sports Division. 21.400 bills of lading. C. Accounts receivable collection expense—incurred al headquarters, charged back to divisions at a charge rate of $9-00 per invoice: Action Sports Division. 32.000 sales invoices; Team Sports Division, 12.500 sales invoices. d. Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Action Sports Division. 120.000 square feet; Team Sports Division. 80.000 square feet. Prepare divisional income statements with two column headings: Action Sports Division and Team Sports Division. Provide supporting schedules for determining service department charges.
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Mesopotamian Materials Inc. (MMI) has two decentralized divisions (Ur and Babylon) that have decision making responsibility over the amount of resources invested in their divisions. Recent financial extracts for both divisions are presented below: Ur Babylon Fixed assets, gross $2,500 $4,000 Accumulated depreciation $1,500 $1,200 Other assets $500 $750 Liabilities $500 $1,000 Sales $6,750 $7,200 Net income after tax* $743 $1,008 Average age of fixed assets (years) 15 5 *Net income is after tax but before interest  MMI's weighted average cost of capital (WACC) is 11.5%. The MMI measures division performance based on the book value of net assets. The producer price index 15 years ago was 100, 116 five years ago, and currently is 125. Which is true, when fixed asset costs are adjusted upward for inflation? Babylon's RONA is 35.8% Babylon's RONA is 26.3% Ur's depreciation expense increases by $19 more than…