The Global Products Corporation has three subsidiaries. Medical Supplies Heavy Machinery Electronics Sales $20,040,000 $5,980,000 $4,730,000 Net Income (after taxes) 1,700,000 592,000 402,000 Assets 8,340,000 8,760,000 3,570,000 If the $8,760,000 investment in the heavy machinery division is sold off and redeployed in the medical supplies subsidiary at the same rate of return on assets currently achieved in the medical supplies division, what will be the new return on assets for the entire corporation

The Global Products Corporation has three subsidiaries. Medical Supplies Heavy Machinery Electronics Sales $20,040,000 $5,980,000 $4,730,000 Net Income (after taxes) 1,700,000 592,000 402,000 Assets 8,340,000 8,760,000 3,570,000 If the $8,760,000 investment in the heavy machinery division is sold off and redeployed in the medical supplies subsidiary at the same rate of return on assets currently achieved in the medical supplies division, what will be the new return on assets for the entire corporation

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 3PA: Macon Mills is a division of Bolin Products. Inc. During the most recent year, Macon had a net...

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Macon Mills is a division of Bolin Products. Inc. During the most recent year, Macon had a net income of $40 million. Included in the income was interest expense of $2,800,000. The companys tax rate was 40%. Total assets were $470 million, current liabilities were $104,000,000, and $72,000,000 of the current liabilities are noninterest bearing. What are the invested capital and ROI for Macon?
Last Resort Industries Inc. is a privately held diversified company with five separate divisions organized as investment centers. A condensed income statement for the Specialty Products Division for the past year, assuming no support department allocations, along with asset information is as follows: The manager of the Specialty Products Division was recently presented with the opportunity to add an additional product line, which would require invested assets of 14,400,000. A projected income statement for the new product line is as follows: The Specialty Products Division currently has 27,000,000 in invested assets, and Last Resort Industries Inc.s overall return on investment, including all divisions, is 10%. Each division manager is evaluated on the basis of divisional return on investment. A bonus is paid, in 8,000 increments, for each whole percentage point that the divisions return on investment exceeds the company average. The president is concerned that the manager of the Specialty Products Division rejected the addition of the new product line, even though all estimates indicated that the product line would be profitable and would increase overall company income. You have been asked to analyze the possible reasons the Specialty Products Division manager rejected the new product line. a. Determine the return on investment for the Specialty Products Division for the past year. b. Determine the Specialty Products Division managers bonus for the past year. c. Determine the estimated return on investment for the new product line. Round percentages to one decimal place and the investment turnover to two decimal places. d. Why might the manager of the Specialty Products Division decide to reject the new product line? Support your answer by determining the projected return on investment for 20Y6, assuming that the new product line was launched in the Specialty Products Division and 20Y6 actual operating results were similar to those of 20Y5. e. Suggest an alternative performance measure for motivating division managers to accept new investment opportunities that would increase the overall company income and return on investment.
The Global Products Corporation has three subsidiaries: Medical Supplies Heavy Machinery Electronics Sales.......... $20,040,000 $5,980,000 $4,730,000 Net income 1,700,000 592,000 402,000 (after taxes) Assets............8,340,000 8,760,000 3,570,000 a. Which division has the lowest return on sales? b. Which division has the highest return on assets? c. Compute the return on assets for the entire corporation. d. If the $8,760,000 investment in the heavy machinery division is sold off and redeployed in the medical supplies subsidiary at the same rate of return on assets currently achieved in the medical supplies division, what will be the new return on assets for the entire corporation?
The Global Products Corporation has three subsidiaries. Medical Supplies Heavy Machinery Electronics Sales $20,040,000 $5,980,000 $4,730,000 Net Income (after taxes) 1,700,000 592,000 402,000 Assets 8,340,000 8,760,000 3,570,000 Which division has the lowest return on sales? Which division has the highest return on assets? Compute the return on assets for the entire corporation? If the $8,760,000 investment in the heavy machinery division is sold off and redeployed in the medical supplies subsidiary at the same rate of return on assets currently achieved in the medical supplies division, what will be the new return on assets for the entire corporation?
Kraft Bowlen owns two sports franchises—the Bladers (a hockey team) and the Ballers (a basketball team). The following information was provided for the coming year. Bladers Ballers Sales $80,000,000 $180,000,000 Variable cost of goods sold 10,000,000 30,000,000 Direct fixed overhead 20,000,000 100,000,000 A sales commission of 5% of sales revenue is paid for each of the two sports franchises. Direct fixed selling and administrative expense was estimated to be $4,000,000 for the Bladers franchise and $10,000,000 for the Ballers franchise. Common fixed overhead associated with owning the franchises was estimated to be $18,000,000; common selling and administrative expense was estimated to be $8,000,000. Required: Prepare a segmented income statement for Kraft Bowlen for the coming year, using variable costing. Note: Enter all amounts as positive numbers except operating loss, if applicable. Kraft Bowlen Segmented Income Statement For the Coming Year Bladers…
Mason Corporation has three business segments: paint, wallpapers, and tools. The company's assumed cost of capital is 12%. Financial information about each segment follows. Paint Segment Wallpaper Segment Tools Segment Paint Segment Wallpaper Segment Tools Segment Segment operating income $650,000 $475,000 $900,000 Invested capital 8,500,000 2,500,000 7,500,000 Calculate the residual income for Paint Segment. A. - $370,000 B. $0.076 C. $13.077 D. - $7,850 E. none of the above
Spartans Inc. has the following information for its two divisions: North and South North South Sales $6,000,000 $6,000,000 Expenses $3,800,000 $3,800,000 Oper. Income $2,200,000 $2,200,000 Taxes $660,000 $770,000 Taxable Inc. $1,540,000 $1,430,000 Invested Assets $13,000,000 $15,000,000 Spartans Inc. has a 10% hurdle rate. Calculate the following for each division: Return on Investment (ROI) North Division ________________ South…
Boar Brand Corporation is a domestic corporation engaged in the manufacturing of milk products. Boar Brand had the following transactions for the quarter:Sold milk to retailers P48,000,000Disposed a milk evaporator machine (Cost is P50,000,000, proceeds are P60,000,000) P10,000,000Distributed milk to its shareholders as part oftheir property dividends P14,000,000Transferred a milking machine to a creditor aspayment of debt P8,000,000 1. How much is output VAT for the taxable quarter?
Sinclair Manufacturing and Boswell Brothers Incorporated are both involved in the production of brick for the homebuilding industry. Their financial information is as follows: Sinclair Boswell Capital Structure Debt @ 10% $ 1,740,000 0 Common stock, $10 per share 1,160,000 $ 2,900,000 Total $ 2,900,000 $ 2,900,000 Common shares 116,000 290,000 Operating Plan: Sales (69,000 units at $15 each) $ 1,035,000 $ 1,035,000 Variable costs 828,000 414,000 Fixed costs 0 319,000 Earnings before interest and taxes (EBIT) $ 207,000 $ 302,000 The variable costs for Sinclair are $12 per unit compared to $6 per unit for Boswell. If you combine Sinclair’s capital structure with Boswell’s operating plan, what is the degree of combined leverage? Note: Round your answer to 2 decimal places. If you combine Boswell’s capital structure with Sinclair’s operating plan, what is the degree of combined leverage? Note: Round your answer to the nearest whole number.…
DDD Corporation, a domestic manufacturing corporation, had gross sales of P100,000,000 for fiscal year ending June 30, 2021 and incurred cost of sales of P60,000,000 and cost of sales of P17,500,000 with the following details: Cost of sales Direct materials P30,000,000 Direct labor 20,000,000 Manufacturing overhead 10,000,000 Operating expenses Salaries and wages P7,000,000 Taxes 300,000 Depreciation 3,500,000 Professional fees 200,000 Advertising expense 3,000,000 Training expenses 3,000,000 Office Supplies 500,000 Required: 1.How much is the additional allowable training expenses, if any? 2.How much is the taxable net income of the company?
DDD Corporation, a domestic manufacturing corporation, had gross sales of P100,000,000 for fiscal year ending June 30, 2021 and incurred cost of sales of P60,000,000 and cost of sales of P17,500,000 with the following details: Cost of sales Direct materials P30,000,000 Direct labor 20,000,000 Manufacturing overhead 10,000,000 Operating expenses Salaries and wages P7,000,000 Taxes 300,000 Depreciation 3,500,000 Professional fees 200,000 Advertising expense 3,000,000 Training expenses 3,000,000 Office supplies 500,000 How much is the taxable net income of the company?
DDD Corporation, a domestic manufacturing corporation, had gross sales of P100,000,000 for fiscal year ending June 30, 2021 and incurred cost of sales of P60,000,000 and cost of sales of P17,500,000 with the following details: Cost of sales Direct materials P30,000,000 Direct labor 20,000,000 Manufacturing overhead 10,000,000 Operating expenses Salaries and wages P7,000,000 Taxes 300,000 Depreciation 3,500,000 Professional fees 200,000 Advertising expense 3,000,000 Training expenses 3,000,000 Office supplies 500,000 How much is the additional allowable training expenses, if any?

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	Medical Supplies	Heavy Machinery	Electronics
Sales	$20,040,000	$5,980,000	$4,730,000
Net Income (after taxes)	1,700,000	592,000	402,000
Assets	8,340,000	8,760,000	3,570,000