Bundle: Cornerstones of Cost Management, Loose-Leaf Version, 4th + CengageNOWv2, 1 term Printed Access Card
4th Edition
ISBN: 9781337539098
Author: Hansen
Publisher: CENGAGE L
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Textbook Question
Chapter 10, Problem 7E
Jarriot, Inc., presented two years of data for its Furniture Division and its Houseware Division.
Required:
- 1. Compute the
ROI and the margin and turnover ratios for each year for the Furniture Division. (Round your answers to four significant digits.) - 2. Compute the ROI and the margin and turnover ratios for each year for the Houseware Division. (Round your answers to four significant digits.)
- 3. Explain the change in ROI from Year 1 to Year 2 for each division.
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A food manufacturer reports the following for two of its divisions for a recent year.
($ millions)
Beverage Division
Cheese Division
Invested assets, beginning
$
2,664
$
4,457
Invested assets, ending
2,594
4,401
Sales
2,682
3,926
Operating income
350
635
Assume that each of the company’s divisions has a required rate of return of 6%. Compute residual income for each division. (Enter your answers in millions.)
Various financial data for the past two years follow.
Output: Sales
Input:
Labor
Raw materials
Last year
This year
Energy
Capital
Other
Last year
This year
LAST YEAR
$200,150
31,105
35,005
4,900
45,500
1,900
THIS YEAR
$201, 150
a. Calculate the total productivity measure for this company for both years.
Note: Round your answers to 2 decimal places.
Total Productivity
Labor
41,105
44,800
4,900
48,750
3,100
b. Calculate the partial productivity measures for labor, capital, and raw materials for this company for both years.
Note: Round your answers to 2 decimal places.
Capital Raw Materials
The Custodial Division of Clark's Corporate Services (CCS) has assets of $1.2 million. During the past year, the division had profits of
$228,000. CCS has a cost of capital of 7.5 percent. Ignore taxes.
Required:
a. Compute the divisional ROI for the Custodial Division.
b. Compute the divisional RI for the Custodial Division.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute the divisional ROI for the Custodial Division.
Divisional ROI
%
Required A
Required B >
Chapter 10 Solutions
Bundle: Cornerstones of Cost Management, Loose-Leaf Version, 4th + CengageNOWv2, 1 term Printed Access Card
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 - The key difference between residual income and EVA...Ch. 10 - If sales and average operating assets for Year 2...Ch. 10 - Prob. 22ECh. 10 - Refer to 10.22. If the imputed interest rate is...Ch. 10 - A company had WACC (weighted average cost of...Ch. 10 - Prob. 25PCh. 10 - Raddington Industries produces tool and die...Ch. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Oriole, Inc., owns a number of food service...Ch. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Renslen, Inc., a truck manufacturing conglomerate,...Ch. 10 - Jump Start Company (JSC), a subsidiary of Mason...Ch. 10 - Prob. 34PCh. 10 - Grate Care Company specializes in producing...
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