EBK CORNERSTONES OF COST MANAGEMENT
3rd Edition
ISBN: 8220100474972
Author: MOWEN
Publisher: CENGAGE L
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Textbook Question
Chapter 10, Problem 21E
SkyBound Airlines provided the following information about its two operating divisions:
Measuring performance using
- a. The Cargo division, with an ROI of 10%.
- b. The Passenger division, with an ROI of 16%.
- c. The Cargo division, with an ROI of 18%.
- d. The Passenger division, with an ROI of 22%.
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Learning and Growth
Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions
follow:
Sales
Net operating income
Average operating assets
Required 1 Required 2
Required:
1. For each division, compute the return on investment (ROI).
2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any
division is 17%. Compute the residual income for each division.
Complete this question by entering your answers in the tabs below.
ROI
Osaka
$ 10,100,000
$ 808,000
$ 2,525,000
Osaka
Division
For each division, compute the return on investment (ROI).
%
Yokohama
$ 31,000,000
$ 3,100,000
$ 15,500,000
Yokohama
%
Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions
follow:
Sales
Net operating income
Average operating assets
Required 1 Required 2
Required:
1. For each division, compute the return on investment (ROI).
2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any
division is 18%. Compute the residual income for each division.
Complete this question by entering your answers in the tabs below.
ROI
Osaka
$ 9,400,000
$ 752,000
$ 2,350,000
Osaka
Division
For each division, compute the return on investment (ROI).
%
Yokohama
$ 24,000,000
$ 2,400,000
$8,000,000
Yokohama
%
Chapter 10 Solutions
EBK CORNERSTONES OF COST MANAGEMENT
Ch. 10 - Prob. 1DQCh. 10 - Explain why firms choose to decentralize.Ch. 10 - Explain how access to local information can...Ch. 10 - What are margin and turnover? Explain how these...Ch. 10 - What are the three benefits of ROI? Explain how...Ch. 10 - What are two disadvantages of ROI? Explain how...Ch. 10 - What is residual income? Explain how residual...Ch. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - What is a transfer price?
Ch. 10 - Prob. 11DQCh. 10 - If the minimum transfer price of the selling...Ch. 10 - If an outside, perfectly competitive market exists...Ch. 10 - Prob. 14DQCh. 10 - Prob. 15DQCh. 10 - Forchen, Inc., provided the following information...Ch. 10 - Refer to Cornerstone Exercise 10.1. Forchen, Inc.,...Ch. 10 - Ignacio, Inc., had after-tax operating income last...Ch. 10 - Prob. 4CECh. 10 - Prob. 5CECh. 10 - Prob. 6CECh. 10 - Jarriot, Inc., presented two years of data for its...Ch. 10 - Refer to Exercise 10.7 for data. At the end of...Ch. 10 - Refer to the data given in Exercise 10.8....Ch. 10 - Brewster Company manufactures elderberry wine....Ch. 10 - Xenold, Inc., manufactures and sells cooktops and...Ch. 10 - Prob. 12ECh. 10 - Jocassee Furniture Manufacturing, Inc., has a...Ch. 10 - Prob. 14ECh. 10 - Mossfort, Inc., has a division in Canada that...Ch. 10 - A multinational corporation has a number of...Ch. 10 - Consider the data for each of the following four...Ch. 10 - The following selected data pertain to the Argent...Ch. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - SkyBound Airlines provided the following...Ch. 10 - Wexford Co. has a subunit that reported the...Ch. 10 - Prob. 23ECh. 10 - Prob. 24ECh. 10 - Prob. 25PCh. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Oriole, Inc., owns a number of food service...Ch. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Jump Start Company (JSC), a subsidiary of Mason...Ch. 10 - Prob. 34PCh. 10 - Grate Care Company specializes in producing...
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