What does it mean to use the DuPont model to help explain a decrease in ROI?

Q: Your team is conducting a CVP analysis for a new product. Different sales projections have different…

A: Cost estimation is defined as the approximation of the program or operation or project cost. It is…

Q: Which of the following is false regarding activity-based costing (ABC)?      a. Companies that have…

A: Activity based costing is a type and method of costing methodology, in which all indirect costs or…

Q: Why do you think the change in the index of labor cost per unit of output is a useful lagging…

A: A lagging indicator is an observable variable whose direction changes after the interest’s target…

Q: Which of the following is NOT a use of CVP (Cost-Volume-Profit) analysis? a.what is the impact on…

A: SOLUTION- CVP ANALYSIS IS USED TO DETERMINE HOW CHANGES IN COSTS AND VOLUME EFFECTS A COMPANY'S…

Q: Explain the differences and similarities between Return on Investment (ROI) and Residual Income (RI)

A: Return on investment (ROI): This financial ratio evaluates how efficiently the assets are used in…

Q: We can begin to answer ROI questions only if we know the goal that the marketing action was intended…

A: Return on Investment (ROI) is a presentation measure used to assess the productivity or benefit of…

Q: Identify and explain the criticisms of using return on investment (ROI) as the onlyperformance…

A:

Q: Hi, can you find pro and cons on this statement? And please explain in detail. Production surpluses…

A: Fluctuating demand  In reaction to shifting economic conditions and consumer spending trends, demand…

Q: Which of the following is not a criticism of using ROI as the only performance measure?

A: ROI stands for Return on investment that shows the return earned by the company on the capital…

Q: What formula do you use to calculate ROI?

A:

Q: most significant drawback of evaluating investment centers using RO

A: ROI is an accounting metric used to evaluate the return on invested capital of the business.

Q: What is the biggest disadvantage of using ROI to evaluate investment centers?

A: Return on Investment: Under return on Investment, the investment opportunity with the highest rate…

Q: Create an example showing how residual income is calculated. What information is used in computing…

A: Return on investment (ROI):   Return on investment evaluates how efficiently the assets are used in…

Q: Which of the following is NOT true of regression techniques for estimating costs?

A: Cost:   Cost can be defined as the cash and cash equivalent which is incurred against the products…

Q: Which of the following is not an underlying assumption of a conventional CVP analysis? Multiple…

A: Cost-volume-profit analysis is the most important tool that is used by managers to specify the cost…

Q: What is the incentive of management in computing efficiency ratios?

A: Efficiency ratios examine a company's ability to use its assets and handle its commitments…

Q: Company X sees a disruption in its supply chain at the same time it sees a decrease in customer…

A: A supply chain network is an organization of individuals, associations, and exercises that move an…

Q: Most organizations use residual income instead of return on investment (ROI) as a performance…

A: The Following statement is True because Residual Income is much better than Return on Investment…

Q: Is this statement true or false? Can you please explain in detail. There is a difference between…

A: Firstly let us understand what is the theoretical production capacity is the optimum production…

Q: Why is there typically a rise in ROI or residual income across time in a division? What undesirable…

A: Return on investment (ROI):   This financial ratio evaluates how efficiently the assets are used in…

Q: What is the fundamental flaw in utilizing income from operations as a success metric for investment…

A: Introduction: Investment centers are companies that make investments to boost their profits.

Q: Which of the following underlying assumptions form(s) the basis for gross profit variance analysis?…

A: Gross profit variance analysis is defined as the one which analyse the profit variance that comprise…

Q: What disadvantages do you see if the chief executive officer (CEO) is primarilyconcerned with…

A: Return on investment is the amount of revenue that is produced on a venture. By measuring the return…

Q: What does it mean when ROI has decreased even though net income hasincreased?

A: Return on investment (ROI): This financial ratio evaluates how efficiently the assets are used in…

Q: What is the reason that makes net profit margin increases and decreases?

A: What is the reason that makes net profit margin increases and decreases?

Q: Explain sales cutoff tests.

A: Auditing:   Auditing refers to an independent examination of financial information of any…

Q: What is a major shortcoming of just using Income from Operations as a performance measure for…

A: Income from operations states the results of deducting the operating expenses from the gross profit.…

Q: What is the major shortcoming of using income from operations as a performance measure for…

A: Investment centre are who do investment of organisation to increase income.

Q: What is an aging schedule? What can be learned from it? How is itaffected by sales fluctuations?

A: Aging schedule is a statement which shows the time taken to recover their receivable and for…

Q: return

A: The term profitability refers to metric which is used to measure profits. An analysis is made on how…

Q: What is the major shortcoming of using income from operations as a performance measure for…

A: Investment center: A department or unit or division of a corporation where its manager is assigned…

Q: What factors affecting ROI does the DuPont method of profitability analysis highlight?

A: DuPont method of Profitability Analysis: According to DuPont method of Profitability Analysis,…

Q: Why have some described the reported savings in cost-avoidance measures as “soft,” “funny money,”…

A: The company using the process to reduces the cost that increases the profit is known as cost…

Q: Gross profit variance analysis can be used to study the effect of:  a. Changes in volume of goods…

A: Gross profit variance analysis is referred as the measurement tool used to measure the capability of…

Q: Please explain a major shortcoming of using income from operations as a performance measure for…

A: Invesment centers are those units or organisations that a business will utilise its capital to…

Q: How frequently do you believe that firms should conduct variance analysis? Explain why?

A: Variance analysis a technique of control that is used by organisations to compare actual costs with…

Q: What is meant by the terms margin and turnover in ROI calculations?

A: ROI( Return on investment) is a performance measure used to measure the efficiency of an…

Q: disadvantage of utilizing income from operations as a performance indicator

A: Income from operations means the excess of revenues from business operations than cost of conducting…

Q: In what way can the use of ROI as a performance measure for investment centers lead to baddecisions?

A: Return On Investment (ROI): It is a measure on the amount of return on a particular investment with…

Q: Is it possible for a retail store such as Apple to use variances in analyzing its operating…

A: Variance analysis is usually done to find the difference between actual performance and budgeted…

Q: Explain how a shift in the sales mix could result in both a higher break-even point and a lower…

A: Sales mix involves the composition of different products and some products have a higher margin of…

Q: What advantages are there to breaking down the ROI computation into two separate elements, marginand…

A: Ratio analysis is a technique that is used to gain knowledge of the company’s profitability,…