Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 10, Problem 10.21E
Presenled below is selected financial information for two divisions of Samberg Brewing.
| Lager | Lite Lager | |
| Contribution margin | $500,000 | $ 300,000 |
| Controllable margin | 200,000 | (c) |
| Average operating assets | (a) | $1,200,000 |
| Minimum |
(b) | 11% |
| 16% | (d) | |
| Residual income | $100,000 | $ 204,000 |
Instructions
Supply the missing information for the lettered items.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Presented below is selected financial information for two divisions of Samberg Brewing.Supply the missing information for the lettered items. (Round minimum rate of return and ROI to 1 decimal place, e.g. 10.5% and round average operating assets to 0 decimal places e.g. 58,971.)
Â
Â
Lager
Â
Lite Lager
Contribution margin
Â
$499,700
Â
Â
Â
$299,500
Â
Â
Controllable margin
Â
199,300
Â
Â
Â
Â
Â
 (c)
Average operating assets
Â
$Â
Â
 (a)
Â
$1,200,000
Â
Â
Minimum rate of return
Â
Â
 %
 (b)
Â
11
 %
Â
Return on investment
Â
20
 %
Â
Â
Â
 %
 (d)
Residual income
Â
$100,400
Â
Â
Â
$204,400
The Magazine Division of XYZ publication Company had the following financial data for the year:
Assets available for use
P 1,000,000 BV
P1,500,000 MV
Residual income
P 100,000
Return on investment
15%
A. What was the Magazine Division’s segment income?
B. If the manager of the Magazine Division is evaluated based on return on investment, how much would she willing to pay for an investment that promise to increase net segment income by P50,000?
The Break Division of Zoe motors Company had the following financial data for the year:
Assets available for use
P 1,000,000 BV
P1,500,000Â MV
Residual income
P 100,000
Return on investment
15%
A. What was the Break Division’s segment income?
B. If the manager of the Break Division is evaluated based on return on investment, how much would she willing to pay for an investment that promise to increase net segment income by P50,000?
Chapter 10 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 10 - Prob. 1QCh. 10 - The following purposes are part of a budgetary...Ch. 10 - How may a budget report for the second quarter...Ch. 10 - Ken Bay questions the usefulness of a master sales...Ch. 10 - Under what circumstances may a static budget be an...Ch. 10 - A flexible budget is really a series of static...Ch. 10 - The static manufacturing overhead budget based on...Ch. 10 - A static overhead budget based on 40,000 direct...Ch. 10 - Megan Pedigo is confused about how a flexible...Ch. 10 - Call Company has prepared a graph of flexible...
Ch. 10 - The flexible budget formula is fixed costs 50,000...Ch. 10 - What is management by exception? What criteria may...Ch. 10 - What is responsibility accounting? Explain the...Ch. 10 - Prob. 14QCh. 10 - Distinguish between controllable and...Ch. 10 - How do responsibility reports differ from budget...Ch. 10 - Prob. 17QCh. 10 - Distinguish among the three types of...Ch. 10 - Prob. 19QCh. 10 - Prob. 20QCh. 10 - Prob. 21QCh. 10 - Prob. 22QCh. 10 - Prob. 23QCh. 10 - Prob. 24QCh. 10 - Prob. 25QCh. 10 - Prob. 26QCh. 10 - For the quarter ended March 31, 2017, Croix...Ch. 10 - Data for Croix Company are given in BE10-1. In the...Ch. 10 - In Rooney Company, direct labor is 20 per hour....Ch. 10 - Gundy Company expects to produce 1,200,000 units...Ch. 10 - Data for Gundy Company are given in BE10-4. In...Ch. 10 - In the Assembly Department of Hannon Company,...Ch. 10 - Torres Company accumulates the following summary...Ch. 10 - For the year ending December 31, 2017, Cobb...Ch. 10 - Prob. 10.9BECh. 10 - Prob. 10.10BECh. 10 - Prob. 10.11BECh. 10 - Prob. 10.12BECh. 10 - Wade Company estimates that it will produce 6,000...Ch. 10 - In Pargo Company's flexible budget graph, the...Ch. 10 - Prob. 10.3DICh. 10 - Prob. 10.4DICh. 10 - Connie Rice has prepared the following list of...Ch. 10 - Crede Company budgeted selling expenses of 30,000...Ch. 10 - Myers Company uses a flexible budget for...Ch. 10 - Using the information in E10-3. assume that in...Ch. 10 - Fallon Company uses flexible budgets to control...Ch. 10 - The actual selling expenses incurred in March 2017...Ch. 10 - Appliance Possible Inc. (AP) is a manufacturer of...Ch. 10 - Rensing Groomers is in the dog-grooming business....Ch. 10 - As sales manager, Joe Batista was given the...Ch. 10 - Chubbs Inc.'s manufacturing overhead budget for...Ch. 10 - UrLink Company is a newly formed company...Ch. 10 - Venetian Company has two production departments....Ch. 10 - Fey Company's Organization chart includes the...Ch. 10 - The Mixing Department manager of Malone Company is...Ch. 10 - Horatio Inc. has three divisions which are...Ch. 10 - The Sports Equipment Division of Harrington...Ch. 10 - The South Division of Wiig Company reported the...Ch. 10 - The Dinkle and Frizell Denial Clinic provides both...Ch. 10 - The Ferrell Transportation Company uses a...Ch. 10 - Presented below is selected information for three...Ch. 10 - Presenled below is selected financial information...Ch. 10 - Bumblebee Company estimates that 300,000 direct...Ch. 10 - Zelmer Company manufactures tablecloths. Sales...Ch. 10 - Ratchet Company uses budgets in controlling costs....Ch. 10 - Clarke Inc. operates the Patio Furniture Division...Ch. 10 - Optimus Company manufactures a variety of tools...Ch. 10 - Durham Company uses a responsibility reporting...Ch. 10 - Sentinel Industries has manufactured prefabricated...Ch. 10 - CURRENT DESIGNS The Current Designs staff has...Ch. 10 - Green Pastures is a 400-acre farm on the outskirts...Ch. 10 - Prob. 10.2BYPCh. 10 - Prob. 10.3BYPCh. 10 - The manufacturing overhead budget for Fleming...Ch. 10 - Ethics Case American Products Corporation...Ch. 10 - Considering Your Costs and Benefits Preparing a...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Forchen, Inc., provided the following information for two of its divisions for last year: Required: 1. For the Small Appliances Division, calculate: a. Average operating assets b. Margin c. Turnover d. Return on investment (ROI) 2. For the Cleaning Products Division, calculate: a. Average operating assets b. Margin c. Turnover d. Return on investment (ROI) 3. What if operating income for the Small Appliances Division was 2,000,000? How would that affect average operating assets? Margin? Turnover? ROI? Calculate any changed ratios (round to four significant digits).arrow_forwardDivision A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%arrow_forwardUsing the information in the previous exercises about Marleys Manufacturing, determine the operating income for department B, assuming department A sold department B 1,000 units during the month and department A reduces the selling price to the market price.arrow_forward
- Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.arrow_forwardThe condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department allocations): The manager of the Consumer Products Division is considering ways to increase the return on investment. a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that 143,750,000 of assets have been invested in the Consumer Products Division. b. If expenses could be reduced by 3,450,000 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division?arrow_forwardEllerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.arrow_forward
- [The following information applies to the questions displayed below.]  Westerville Company reported the following results from last year’s operations:    Sales $ 1,200,000 Variable expenses  320,000 Contribution margin  880,000 Fixed expenses  640,000 Net operating income $ 240,000 Average operating assets $ 600,000   At the beginning of this year, the company has a $150,000 investment opportunity with the following cost and revenue characteristics:    Sales $ 240,000  Contribution margin ratio  50 % of sales Fixed expenses $ 84,000    The company’s minimum required rate of return is 15%.  4. What is the margin related to this year’s investment opportunity?arrow_forward[The following information applies to the questions displayed below.]  Westerville Company reported the following results from last year’s operations:    Sales $ 1,200,000 Variable expenses  320,000 Contribution margin  880,000 Fixed expenses  640,000 Net operating income $ 240,000 Average operating assets $ 600,000   At the beginning of this year, the company has a $150,000 investment opportunity with the following cost and revenue characteristics:    Sales $ 240,000  Contribution margin ratio  50 % of sales Fixed expenses $ 84,000    The company’s minimum required rate of return is 15%.  7. If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)arrow_forwardProvisions​ Company, a manufacturer of office​ supplies, provides the following financial​ information:   Pen Division Pencil Division Operating income ​$100,000 ​$40,000 Net sales ​$500,000 ​$150,000 Total assets at Jan. 1 ​$580,000 ​$350,000 Total assets at Dec. 31 ​$610,000 ​$300,000  Calculate the return on investment for the Pen Division.​ (Round your answer to two decimal​ places.)arrow_forward
- The following is partial information for Charleston Company’s most recent year of operation. It manufactures lawn mowers and categorizes its operations into two divisions: Bermuda and Midiron.  Bermuda Division  Midiron Division Sales revenue  ?   $ 600,000  Average invested assets $ 2,500,000    ?  Net operating income $ 160,000   $ 150,000  Profit margin  20 %   ?  Investment turnover  ?    0.16  Return on investment  ?    ?  Residual income $ 40,000   $ (30,000 )  Required:1. Without making any calculations, determine whether each division’s return on investment is above or below Charleston’s hurdle rate.2. Determine the missing amounts in the preceding table.3. What is Charleston’s hurdle rate?4-a. Suppose Charleston has the opportunity to invest additional assets to help expand the company’s market share. The expansion would require an average investment of $2,800,000 and would generate $140,000 in additional income. Calculate…arrow_forwardTerra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year:  Retail Division Wholesale Division Operating income $ 2,750,000 $ 6,250,000 Operating assets $ 18,500,000 $ 38,500,000 Terra Company has set a target return on investment (ROI) of 14% for both divisions. Which of the following statements is accurate? Residual income for the wholesale division was $160,000. Residual income for the wholesale division was $860,000. Residual income for the retail division was $860,000. None of these answers are correct.arrow_forwardThe accounting firm of JN Corporation has been studying the sales requirements of the Shayan Bottling Company. In the course of the study, the managing partner submits the following estimated data:  Sales Rs. 900,000 Fixed marketing expenses Rs. 71,000 Direct materials 206,200 Variable marketing expenses 80,000 Direct Labor 165,200 Fixed administrative expenses 9,500 FOH 171,896 Variable administrative expenses 4,000 Variable FOH 102,600    Calculate Break-Even Point in amount for JN Corporatiarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Inspection and Quality control in Manufacturing. What is quality inspection?; Author: Educationleaves;https://www.youtube.com/watch?v=Ey4MqC7Kp7g;License: Standard youtube license