ACCT.PRINCIPLES-WILEYPLUS NEXTGEN
14th Edition
ISBN: 9781119709954
Author: Weygandt
Publisher: WILEY
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Chapter 25, Problem 7BE
(LO 3) Torres Company accumulates the following summary data for the year ending December 31, 2020, for its Water Division, which it operates as a profit center: sales—$2,000,000 budget, $2,080,000 actual: variable costs—$1,000,000 budget, $1,050,000 actual; and controllable fixed costs—$300,000 budget, $305,000 actual. Prepare a responsibility report for the Water Division for the year ending December 31, 2020.
Prepare a responsibility report for a profit center.
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Torres Company accumulates the following summary data for the year ending December 31, 2017, for its Water Division, which it operates as a profit center: sales— $2,000,000 budget, $2,080,000 actual; variable costs—$1,000,000 budget, $1,050,000 actual; and controllable fixed costs—$300,000 budget, $305,000 actual. Prepare a responsibility report for the Water Division.
Compute the Revenue Effect- Growth Component, indicate if
favorable/(unfavorable). *The activity driver for conversion cost
is the direct labor hours.
PROBLEM: Financial Perspective
Gloria Corporation presents the following information for year 2020 & 2021
2020
2021
Sales
P 45, 000
P 38, 000
Production Expenses
Direct materials
9, 504
8, 976
12,000
Direct labor
10,000
Factory overhead
Gross Profit
5, 000
P 14, 520
5, 000
P 18, 000
Operating Expenses
13,000
13, 000
Operating income
P5, 000
P1, 520
During the year 2020, the corporation was able to sell 10, 000 units which is 25% above the sales in
2021. The same capacity was used for factory overhead and operating expenses for years 2020 and
2021. Other data are as follows:
2020
2021
Raw materials used ( kg)
1, 200
720
Direct labor hours
1, 000
816
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RequIred Informatlon
(The following information applies to the questions displayed below.]
Westerville Company reported the following results from last year's operations:
$ 2,300,00e
Sales
Variable expenses
Contribution margin
Fixed expenses
000
1,630,000
Net operating income
Average operating assets
$ 1,437,500
At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenue
characteristics:
Sales
Contribution margin ratio
Fixed expenses.
000
50% of sales
$161,000
The company's minimum required rate of return is 15%.
11. What is last year's residual income?
Residual income,
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Chapter 25 Solutions
ACCT.PRINCIPLES-WILEYPLUS NEXTGEN
Ch. 25 - Prob. 1QCh. 25 - Prob. 2QCh. 25 - Prob. 3QCh. 25 - 4. Ken Bay questions the usefulness of a master...Ch. 25 - Prob. 5QCh. 25 - Prob. 6QCh. 25 - Prob. 7QCh. 25 - Prob. 8QCh. 25 - Prob. 9QCh. 25 - Prob. 10Q
Ch. 25 - Prob. 11QCh. 25 - Prob. 12QCh. 25 - Prob. 13QCh. 25 - Prob. 14QCh. 25 - Prob. 15QCh. 25 - Prob. 16QCh. 25 - Prob. 17QCh. 25 - Prob. 18QCh. 25 - Prob. 19QCh. 25 - Prob. 20QCh. 25 - Prob. 21QCh. 25 - Prob. 22QCh. 25 - Prob. 23QCh. 25 - Prob. 24QCh. 25 - Prob. 25QCh. 25 - Prob. 26QCh. 25 - Prob. 1BECh. 25 - Prob. 2BECh. 25 - Prob. 3BECh. 25 - Prob. 4BECh. 25 - Prob. 5BECh. 25 - Prob. 6BECh. 25 - (LO 3) Torres Company accumulates the following...Ch. 25 - Prob. 8BECh. 25 - Prob. 9BECh. 25 - Prob. 10BECh. 25 - Prob. 11BECh. 25 - Prob. 12BECh. 25 - Prob. 1DIECh. 25 - Prob. 2DIECh. 25 - Prob. 3DIECh. 25 - Prob. 4DIECh. 25 - Prob. 1ECh. 25 - E24-2 Crede Company budgeted selling expenses of...Ch. 25 - Prob. 3ECh. 25 - Prob. 4ECh. 25 - Prob. 5ECh. 25 - Prob. 6ECh. 25 - Prob. 7ECh. 25 - Prob. 8ECh. 25 - Prob. 9ECh. 25 - Prob. 10ECh. 25 - Prob. 11ECh. 25 - Prob. 12ECh. 25 - Prob. 13ECh. 25 - Prob. 14ECh. 25 - Prob. 15ECh. 25 - Prob. 16ECh. 25 - Prob. 17ECh. 25 - Prob. 18ECh. 25 - Prob. 19ECh. 25 - Prob. 20ECh. 25 - Prob. 21ECh. 25 - Prob. 1PSACh. 25 - (LO 2) Zelmer Company manufactures tablecloths....Ch. 25 - Prob. 3PSACh. 25 - Prob. 4PSACh. 25 - Prob. 5PSACh. 25 - Prob. 6PSACh. 25 - Prob. 7PSACh. 25 - Service Green Pastures is a 400-acre farm on the...Ch. 25 - Prob. 2EYCTCh. 25 - Prob. 3EYCTCh. 25 - Prob. 4EYCTCh. 25 - Prob. 5EYCTCh. 25 - Prob. 7EYCT
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- 3. RequIred Informatlon The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: $2,300,000 Sales Variable expenses Contribution margin Fixed expenses 1,170,000 Net operating income Average operating assets $ 1,437,500 At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenue characteristics: 50% of sales Contribution margin ratio Fixed expenses $4161,000 The company's minimum required rate of return is 15%. 7. If the comnpany pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? < Prev 15. of 15 re to search T12L F4 F5 F7 F11arrow_forwardCompute the Productivity Component indicate if favorable/(unfavorable). PROBLEM: Financial Perspective Gloria Corporation presents the following information for year 2020 & 2021 2020 2021 Sales P 45, 000 P 38, 000 Production Expenses Direct materials 12,000 9, 504 Direct labor 10,000 8, 976 Factory overhead Gross Profit 5, 000 5, 000 P 18, 000 P 14, 520 Operating Expenses Operating income 13,000 13, 000 P5, 000 P1, 520 During the year 2020, the corporation was able to sell 10, 000 units which is 25% above the sales in 2021. The same capacity was used for factory overhead and operating expenses for years 2020 and 2021. Other data are as follows: 2020 2021 Raw materials used ( kg) 1, 200 720 Direct labor hours 1, 000 816arrow_forwardThe GAAP income statement for Pace Company for the year ended December 31, 2022, shows sales $900,000, cost of goods sold $600,000, and operating expenses $200,000. Assuming all costs and expenses are 70% variable and 30% fixed, prepare a CVP income statement through contribution margin.arrow_forward
- Various Financial data for 2019 and 2020 follows. Calculate the total productivity measure and the partial measures for labour, raw materials, and energy for this company for both years. 2019 $75,000 Output: Input: Sales Total Productivity Partial Lab Productivity Partial Material Productivity Labour Materials Energy Other 19,150 21,620 12,250 8,300 61,320 For your answers, write value rounded to two decimal points. Include zeros if applicable and do not include any symbols. (Examples: 3.445 should be written as 3.45, 3.000 should be written as 3.00) 2019 2020 2020 $92,300 22,150 25,120 26,730 5,170 79,170 Partial Energy Partial Other For your answers below, type one of the options exactly as provided in the brackets. Based on the results the company overall is The company's best improvement is seen in The company's biggest decline is seen in (improving / declining). (labour / material / energy / other). (labour / material / energy / other).arrow_forwardRequired information [The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets ROI At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: Sales $ 1,800,000 435,000 1,365,000 1,005,000 $360,000 $ 1,200,000 $360,000 $ 216,000 The company's minimum required rate of return is 10% Contribution margin ratio Fixed expenses 70 of sales. 6. What is the ROI related to this year's investment opportunity?arrow_forwardThe GAAP income statement for Wildhorse Company for the year ended December 31, 2022, shows sales $950,000, cost of goods sold $595,000, and operating expenses $165,000. Assuming all costs and expenses are 80% variable and 20% fixed, prepare a CVP income statement through contribution margin. Sales Variable Expenses Contribution Margin Fixed Expenses Net Income /(Loss) LA PACE COMPANY CVP Income Statement tA LA 950000arrow_forward
- Crane, Inc. has three divisions: Bud, Wise, and Er. The results of operations for May, 2022 are presented below. Units sold Revenue Less variable costs Less direct fixed costs Less allocated fixed costs Net income Bud 2,700 $63,000 28,800 12,600 5,400 $16,200 Wise 4,500 $45,000 23,400 17,100 9,000 $(4,500) Er 1,800 $36,000 14,400 10,800 3,600 $7,200 Total 9,000 $144,000 66,600 40,500 18,000 $18,900 All of the allocated costs will continue even if a division is discontinued. Crane allocates indirect fixed costs based on the number of units to be sold. Since the Wise division has a net loss, Crane is concerned that it should be discontinued. Crane thinks that if the division is closed, that sales at the Bud division will increase by 12% while sales at the Er division will stay the same.arrow_forwardDJH Enterprises has 3 departments. Operating results for 2019 are as follows: Department 1 Department 2 Department 3 Sales Variable Costs Contribution Margin Direct fixed expenses Common fixed expenses Total fixed expenses Operating income (loss) $737,000 489,500 $247,500 $132,000 82,500 Select one: $214,500 $33,000 $354,200 315,700 $38,500 $29,700 33,000 $62,700 $(24,200) $941,600 662,200 $279,400 $179,300 103,400 $282,700 $(3,300) DJH is considering eliminating the departments that show losses. Assume that the direct fixed expenses could be avoided if the department is eliminated. What effect would elimination of Department 3 have on DJH's total operating income? a. It would decrease total operating income by $100,100. b. It would increase total operating income by $103,400. c. It would decrease total operating income by $279,400. d. None of these options are correct. e. It would decrease total operating income by $3,300.arrow_forwardDd3. For the most recent year, Petunia Company had the following data for its Clarkston Division, an investment center: total contribution margin—$671,110 budget, $695,741 actual; controllable fixed costs—$298,900 budget, $295,702 actual. Average operating assets for the year were $1,959,045. Determine the actual return on investment.arrow_forward
- Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses $ 1,750, 000 520,000 1, 230, 000 880, 000 Net operating income %24 350, 000 Average operating assets 24 875, 000 At the beginning of this year, the company has a $200,000 investment opportunity with the following cost and revenue characteristics: Sales $ 320, 000 Contribution margin ratio Fixed expenses 60% of sales $ 128, 000 The company's minimum required rate of return is 20%. 4. What is the margin related to this year's investment opportunity? Margin Drovarrow_forwardCoyle Manufacturing reports the following information for year 1: Sales revenue (60,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs. Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs Operating profits (losses) Coyle Manufacturing Budgeted Income Statement For Year 2 Sales revenue Manufacturing costs: Materials Variable cash costs Fixed cash costs Depreciation (fixed) All depreciation charges are fixed. Manufacturing depreciation is expected to increase by 10 percent in year 2. Marketing and administrative depreciation are expected to remain the same for year 2. Sales volume is expected to increase by 5 percent, but prices are expected to fall by 10 percent. Materials costs per unit are expected to decrease by 8 percent. Unit variable cash manufacturing costs are expected to increase by 15 percent. Fixed cash costs are expected to…arrow_forwardCoolbrook Company has the following information available for the past year: River Division Stream Division Sales revenue $ 1,209,000 $ 1,810,000 Cost of goods sold and operating expenses 900,000 1,286,000 Net operating income $ 309,000 $ 524,000 Average invested assets $ 1,200,000 $ 1,460,000 The company’s hurdle rate is 6.26 percent. Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) river steam ROI % % Residual income (loss) 2. Recalculate ROI and residual income for the division for each independent situation that follows: Operating income increases by 11 percent. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.). Loss…arrow_forward
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