The following are the details from the incomestatements of division S and division C for the yearending March 2014. Figures in '000 Tshs– Sales revenue100,000120,000- Operating cost- Interest cost64,00075,000|6,00010,000- Capital invested– Capital invested include debt- WACC- Rate of corporate tax- Required;- Calculate NOPAT as adjusted for EVA and also calculate EVAfor both the divisions. Which Division performed better.122,000150,00010%12.5%40%44%-

Let Sales = S Operating cost = O Tax rate = T WACC = r Capital invested = C

The following are the details from the income statements of division S and division C for the year ending March 2014. Figures in '000 Tshs - Sales revenue 100,000 120,000 - Operating cost - Interest cost - Capital invested - Capital invested include debt - WACC - Rate of corporate tax - Required; - Calculate NOPAT as adjusted for EVA and also calculate EVA for both the divisions. Which Division performed better. 64,000 75,000 | 6,000 10,000 - 122,000 150,000 - - 10% 12.5% - 40% 44% - -

The following are the details from the income statements of division S and division C for the year ending March 2014. Figures in '000 Tshs - Sales revenue 100,000 120,000 - Operating cost - Interest cost - Capital invested - Capital invested include debt - WACC - Rate of corporate tax - Required; - Calculate NOPAT as adjusted for EVA and also calculate EVA for both the divisions. Which Division performed better. 64,000 75,000 | 6,000 10,000 - 122,000 150,000 - - 10% 12.5% - 40% 44% - -

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

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 52E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...

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Service department charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of 64,560, and the Purchasing Department had expenses of 40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: A. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. B. Using the cost driver information in (A), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. C. Why does the Residential Division have a larger support department allocation than the other two divisions, even though its sales are lower?
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Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Refer to the information for Juroe Company on the previous page. Also, assume that Juroes total assets at the beginning of last year equaled 17,350,000 and that the tax rate applicable to Juroe is 40%. Required: Note: Round answers to two decimal places. 1. Calculate the average total assets. 2. Calculate the return on assets.
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