Suppose that Division T can sell only 10,000 timers to outside customers. Whatis the lowest acceptable transfer price from the viewpoint of the sellingdivision?Division T of Clocker Company makes a timer which it sells for P30 to outside customers.The division has supplied the following data concerning the timer:Monthly capacityVariable cost per unit12,000 timersP15| Fixed cost per unitP10Presently, Division S of Clocker Company is currently buying 5,000 similar timers cachmonth from an overseas supplier at P27 each. Division S would like to acquire its timers fromDivision T if the price is right.A. P24B. P27C. P30D. P15 What was the Paper Division's net operating income last year?The following information relates to last year's operations at the Paper Division ofGermane Corporation:15%Minimum required rate of returnReturn on investment (ROI)18%SalesP810,000Turnover (on operating assets)5 timesA. P24,300В. Р29, 160C. P145,800D. P162,000What was the Bread Division's minimum required rate of return last year?The following information relates to last year's operations at the Bread Division ofRison Bakery, Inc.:Residual incomeP12,000Net operating incomeP60,000SalesP300,000Average operating assetsP400,000А. 12%B. 4%C. 15%D. 20%

Note: Since you have asked multiple questions, we will solve the first question for you. If you want…

Suppose that Division T can sell only 10,000 timers to outside customers. What is the lowest acceptable transfer price from the viewpoint of the selling division? Division T of Clocker Company makes a timer which it sells for P30 to outside customers. The division has supplied the following data concerning the timer: Monthly capacity | Variable cost per unit | Fixed cost per unit 12,000 timers PIS P10 Presently, Division S of Clocker Company is currently buying 5,000 similar timers cach month from an overscas supplier at P27 cach. Division S would like to acquire its timers from Division T if the price is right. A. P24 B. P27 C. P30 D. P15

Suppose that Division T can sell only 10,000 timers to outside customers. What is the lowest acceptable transfer price from the viewpoint of the selling division? Division T of Clocker Company makes a timer which it sells for P30 to outside customers. The division has supplied the following data concerning the timer: Monthly capacity | Variable cost per unit | Fixed cost per unit 12,000 timers PIS P10 Presently, Division S of Clocker Company is currently buying 5,000 similar timers cach month from an overscas supplier at P27 cach. Division S would like to acquire its timers from Division T if the price is right. A. P24 B. P27 C. P30 D. P15

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 27E: Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the...

See similar textbooks

Similar questions

Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%
Forchen, Inc., provided the following information for two of its divisions for last year: Required: 1. For the Small Appliances Division, calculate: a. Average operating assets b. Margin c. Turnover d. Return on investment (ROI) 2. For the Cleaning Products Division, calculate: a. Average operating assets b. Margin c. Turnover d. Return on investment (ROI) 3. What if operating income for the Small Appliances Division was 2,000,000? How would that affect average operating assets? Margin? Turnover? ROI? Calculate any changed ratios (round to four significant digits).
Macom Manufacturing has total contribution margin of $61,250 and net income of $24,500 for the month of June. Marcus expects sales volume to increase by 10% in July. What are the degree of operating leverage and the expected percent change in income for Macom Manufacturing? 0.4 and 10% 2.5 and 10% 2.5 and 25% 5.0 and 50%
Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: At the beginning of last year, Elway had 28,300,000 in operating assets. At the end of the year, Elway had 23,700,000 in operating assets. Required: 1. Compute average operating assets. 2. Compute the margin and turnover ratios for last year. (Note: Round the answer for margin ratio to two decimal places.) 3. Compute ROI. (Note: Round answer to two decimal places.) 4. CONCEPTUAL CONNECTION Briefly explain the meaning of ROI. 5. CONCEPTUAL CONNECTION Comment on why the ROI for Elway Company is relatively high (as compared to the lower ROI of a typical manufacturing company).
During the current year, Plainfield Manufacturing earned income of $845,000 from total sales of $9,350,000 and average capital assets of $13,500,000. Using the sales margin from the previous exercise, what is the total ROI for the company during the current year?
Margin of safety Jorgensen Company has sales of 380,000,000, and the break-even point in sales dollars is 323,000,000. Determine Jorgensen Companys margin of safety as a percent of current sales.
The following selected data pertain to the Argent Division for last year: Required: 1. How much is the residual income? 2. How much is the return on investment? (Rounded to four significant digits.)
Xenold, Inc., manufactures and sells cooktops and ovens through three divisions: Home, Restaurant, and Specialty. Each division is evaluated as a profit center. Data for each division for last year are as follows (numbers in thousands): The income tax rate for Xenold, Inc., is 40 percent. Xenold, Inc., has two sources of financing: bonds paying 5 percent interest, which account for 25 percent of total investment, and equity accounting for the remaining 75 percent of total investment. Xenold, Inc., has been in business for over 15 years and is considered a relatively stable stock, despite its link to the cyclical construction industry. As a result, Xenold stock has an opportunity cost of 5 percent over the 4 percent long-term government bond rate. Xenolds total capital employed is 5.04 million (2,600,000 for the Home Division, 1,700,000 for the Restaurant Division, and the remainder for the Specialty Division). Required: 1. Prepare a segmented income statement for Xenold, Inc., for last year. 2. Calculate Xenolds weighted average cost of capital. (Round to four significant digits.) 3. Calculate EVA for each division and for Xenold, Inc. 4. Comment on the performance of each of the divisions.
If a firm has a contribution margin of $59,690 and a net income of $12,700 for the current month, what is their degree of operating leverage? A. 0.18 B. 1.18 C. 2.4 D. 4.7
During the current year, Sokowski Manufacturing earned income of $350,000 from total sales of $5,500,000 and average capital assets of $12,000, 000. What is the sales margin?
Company A has current sales of $10,000,000 and a 45% contribution margin. Its fixed costs are $3,000,000. Company B is a service firm with current service revenue of $5,000,000 and a 20% contribution margin. Company Bs fixed costs are $500,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 25% increase in sales? Explain why.
If a firm has a contribution margin of $78M90 and a net income of $13,700 for the current month, what is their degree of operating leverage? 0.21 1.21 2.4 5.7