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Operations Management
The three divisions of Yummy Foods are Snack Goods, Cereal, and Frozen Foods. The divisions are structured as investment centers. The following responsibility reports were prepared for the three divisions for the prior year: Snack Goods Cereal Frozen Foods Revenues $ 2,200,000 $ 2,520,000 $2,100,000 Operating expenses Operating income before support department allocations Support department allocations: Promotion (1,366,600) (1,122,000) (976,800) $ 833,400 $ 1,398,000 $1,123,200 $ (300,000) $ (600,000) $ (468,000) Legal Total service department charges Operating income (137,400) $ (437,400) $ 396,000 (243,600) $ (843,600) $ 554,400 (235,200) $ (703,200) $ 420,000 Invested assets $ 2,000,000 $1,680,000 $1,750,000 a. Which division is making the best use of invested assets and should be given priority for future capital investments?

The three divisions of Yummy Foods are Snack Goods, Cereal, and Frozen Foods. The divisions are structured as investment centers. The following responsibility reports were prepared for the three divisions for the prior year: Snack Goods Cereal Frozen Foods Revenues $ 2,200,000 $ 2,520,000 $2,100,000 Operating expenses Operating income before support department allocations Support department allocations: Promotion (1,366,600) (1,122,000) (976,800) $ 833,400 $ 1,398,000 $1,123,200 $ (300,000) $ (600,000) $ (468,000) Legal Total service department charges Operating income (137,400) $ (437,400) $ 396,000 (243,600) $ (843,600) $ 554,400 (235,200) $ (703,200) $ 420,000 Invested assets $ 2,000,000 $1,680,000 $1,750,000 a. Which division is making the best use of invested assets and should be given priority for future capital investments?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter9: Decision Making Under Uncertainty
Section9.5: Multistage Decision Problems
Problem 17P
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Answer V. Statement of the problem. The second picture is the problem or basis for this study analysis.

V- STATEMENT OF THE PROBLEM · Based on the areas of consideration come up with central problem of the case. Or you can enumerate the problems you find and arrange them in order of significance in order to be able to identify the central problem. · Always write one line statement of the problem either a declarative statement form or question form.
Transcribed Image Text:V- STATEMENT OF THE PROBLEM · Based on the areas of consideration come up with central problem of the case. Or you can enumerate the problems you find and arrange them in order of significance in order to be able to identify the central problem. · Always write one line statement of the problem either a declarative statement form or question form.
TIF 10-4 Evaluating Divisional Performance The three divisions of Yummy Foods are Snack Goods, Cereal, and Frozen Foods. The divisions are structured as investment centers. The following responsibility reports were prepared for the three divisions for the prior year: Snack Goods Cereal Frozen Foods $ 2,200,000 (1,366,600) $ 2,520,000 (1,122,000) Revenues $2,100,000 Operating expenses Operating income before support department allocations Support department allocations: (976,800) $833,400 $ 1,398,000 $1,123,200 Promotion $ (300,000) $ (600,000) $ (468,000) Legal Total service department charges Operating income (137,400) $ (437,400) (243,600) $ (843,600) $ 554,400 $ 1,680,000 (235,200) $ (703,200) $ 420,000 $396,000 Invested assets $ 2,000,000 $1,750,000 a. Which division is making the best use of invested assets and should be given priority for future capital investments?
Transcribed Image Text:TIF 10-4 Evaluating Divisional Performance The three divisions of Yummy Foods are Snack Goods, Cereal, and Frozen Foods. The divisions are structured as investment centers. The following responsibility reports were prepared for the three divisions for the prior year: Snack Goods Cereal Frozen Foods $ 2,200,000 (1,366,600) $ 2,520,000 (1,122,000) Revenues $2,100,000 Operating expenses Operating income before support department allocations Support department allocations: (976,800) $833,400 $ 1,398,000 $1,123,200 Promotion $ (300,000) $ (600,000) $ (468,000) Legal Total service department charges Operating income (137,400) $ (437,400) (243,600) $ (843,600) $ 554,400 $ 1,680,000 (235,200) $ (703,200) $ 420,000 $396,000 Invested assets $ 2,000,000 $1,750,000 a. Which division is making the best use of invested assets and should be given priority for future capital investments?
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ISBN:
9781337406659
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