Three divisions of Jameson Co. report the following sales and operating data: Fitness Training $590,000 $118,000 $ 11,800 Athletic Spa Services Wear $840,000 $168,000 $ 16,800 Sales Average operating assets Operating income Minimum required rate of return $520,000 $130,000 $ 15,600 5% 5 % 7% Required: 1. Compute the ROI for each division, using the formula stated in terms of margin and turnover. ROI Fitness training Spa services Athletic wear % % % 2. Compute the residual income for each division. Fitness Training Spa Services Athletic Wear Residual income

Three divisions of Jameson Co. report the following sales and operating data: Fitness Training $590,000 $118,000 $ 11,800 Athletic Spa Services Wear $840,000 $168,000 $ 16,800 Sales Average operating assets Operating income Minimum required rate of return $520,000 $130,000 $ 15,600 5% 5 % 7% Required: 1. Compute the ROI for each division, using the formula stated in terms of margin and turnover. ROI Fitness training Spa services Athletic wear % % % 2. Compute the residual income for each division. Fitness Training Spa Services Athletic Wear Residual income

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 1CE: Forchen, Inc., provided the following information for two of its divisions for last year: Required:...

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