Sales Variable costs Controllable fixed costs Average operating assets 1 2 3 Top management is unhappy with the investment center's return on investment (ROG it asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action $2,950,000 (a) Compute the return 1,976,500 600,000 5.000.000 Increase sales by $300,000 with no change in the contribution margin percentage Reduce variable costs by $155.000 Reduce average operating sets by 300% Return on Investment investment (RO0 for the current year (Round ROI o decimal places, s 1.57%) IN Using the ROI equation compute the ROI under each of the proposed courses of action (Round ROI to 2 decimal places, eg 1.57%) Return on investment

Sales Variable costs Controllable fixed costs Average operating assets 1 2 3 Top management is unhappy with the investment center's return on investment (ROG it asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action $2,950,000 (a) Compute the return 1,976,500 600,000 5.000.000 Increase sales by $300,000 with no change in the contribution margin percentage Reduce variable costs by $155.000 Reduce average operating sets by 300% Return on Investment investment (RO0 for the current year (Round ROI o decimal places, s 1.57%) IN Using the ROI equation compute the ROI under each of the proposed courses of action (Round ROI to 2 decimal places, eg 1.57%) Return on investment

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 1TIF

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The South Division of Wiig Company reported the following data for the current year. Sales Variable costs Controllable fixed costs Average operating assets 1. 2 $3,000,000 1,950,000 Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. 3. 600,000 5,000,000 Increase sales by $300,000 with no change in the contribution margin percentage. Reduce variable costs by $150,000. Reduce average operating assets by 6.25%. (a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%)
The South Division of Wiig Company reported the following data for the current year. Sales Variable costs Controllable fixed costs Average operating assets 1. 2. 3. Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. Return on Investment $2,950,000 1,947,000 Increase sales by $300,000 with no change in the contribution margin percentage. Reduce variable costs by $155,000. Reduce average operating assets by 4%. Action 1 595,000 (a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%.) Action 2 5,000,000 Action 3 (b) Using the ROI formula, compute the ROI under each of the proposed courses of action. (Round ROI to 2 decimal places, e.g. 1.57%.) Return on investment do % % % %
The South Division of Bramble Company reported the following data for the current year. Sales Variable costs Controllable fixed costs Average operating assets 1. 2. Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. 3. Return on Investment $2,900,000 Increase sales by $300,000 with no change in the contribution margin percentage. Reduce variable costs by $160,000. Reduce average operating assets by 3.00%. 1,943,000 (a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%) Action 1 600,000 5,000,000 Action 2 Action 3 (b) Using the ROI equation, compute the ROI under each of the proposed courses of action. (Round ROI to 2 decimal places, e.g. 1.57%) Return on investment % % 1 % %
The Atlantic Division of Oriole Productions Company reported the following results for 2022: Sales Variable costs Controllable fixed costs Average operating assets Management is considering the following independent alternative courses of action in 2023 in order to maximize the return on investment for the division. 1. 2. 3. (a) $4,032,000 3,213,504 314,000 2,514,000 Reduce controllable fixed costs by 10% with no change in sales or variable costs.. Reduce average operating assets by 10% with no change in controllable margin. Increase sales $500,000 with no change in the contribution margin percentage. Compute the return on investment for 2022. (Round answer to 1 decimal place, e.g. 52.5.) Return on Investment Save for Later % Attempts: 0 of 1 used (b) The parts of this question must be completed in order. This part will be available when you complete the part above. Submit Answer
-/1 Question 4 View Policies Current Attempt in Progress ort Sunland Companyrecorded operating data for its Cheap division for the year. Sunland requires its return to be 10%. $1200000 Sales Controllable margin 180000 Total average assets 3600000 Fixed costs 100000 What is the RÓI for the year? O 33% 19% 5% O 8%
Top management is unhappy with the investment center's return on investment (ROD) It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action 1 2 3 (a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%) Increase sales by $300,000 with no change in the contribution margin percentage. Reduce variable costs by $160,000 Reduce average operating assets by 3% Return on Investment Action 1 (b) Using the ROI formula, compute the ROI under each of the proposed courses of action. (Round ROI to 2 decimal places, eg. 1.57%) Action 21 Action 31 Save for Later % Return on investment Attempts: 0 of 1 used Submit Answer P
The South Division of Wiig Company reported the following data for the current year Sales $ 2900000 Variable costs $ 1943000 Controllable fixed cost $ 590000 Average operating costs $ 5000000 Top management is unhappy with the investment center’s return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. Increase sales by $300,000 with no change in the contribution margin percentage. Reduce variable costs by $150,000. Reduce average operating assets by 3%. Compute ! Compute the return on investment (ROI) for the current year. Using the ROI formula, compute the ROI under each of the proposed courses of action.
Use the following information to answer the questions. Company X $ 12,480,000 $ 3,120,000 561,600 8.00% Company Y $ 28,480,000 $ 7,120,000 2$ Company Z $ 20,480,000 $ 5,120,000 532,480 Sales Average operating assets Net operating income Minimum required rate of return $ 512,640 8.50% 10.40% Required: 1. Compute the return on investment (ROI) for each company using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each company. 3. Each company is presented with an investment opportunity that would yield a 9% rate of return. a. Assume performance is measured based on ROI. Indicate whether each company will likely accept or reject the investment opportunity. b. Assume performance is measured based on residual income. Indicate whether each company will likely accept or reject the investment opportunity. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req ЗA Req 3B Each company is presented with an investment…
Use the following information to answer the questions. Company X $ 12,480,000 $ 3,120,000 $ Company Y $ 28,480,000 $ 7,120,000 512,640 8.50% Company Z $ 20,480,000 $ 5,120,000 532,480 10.40% Sales Average operating assets Net operating income Minimum required rate of return 561,600 8.00% Required: 1. Compute the return on investment (ROI) for each company using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each company. 3. Each company is presented with an investment opportunity that would yield a 9% rate of return. a. Assume performance is measured based on ROI. Indicate whether each company will likely accept or reject the investment opportunity. b. Assume performance is measured based on residual income. Indicate whether each company will likely accept or reject the investment opportunity. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Reg ЗA Req 3B Compute the return on investment (ROI) for each company…
Current Attempt in Progress A company has three product lines, one of which has the following results: Sales Variable expenses Contribution margin Fixed expenses Net loss Save for Later esc If this product line is eliminated, 60% of the fixed expenses will be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will ! O increase by $35000. O increase by $15000. O decrease by $90000. O decrease by $15000. 1 $221000 Q 131000 A 90000 125000 $(35000) 2 W S #3 с E D $ 4 R % 5 G Search or type URL FL Attempts: 0 of 1 used MacBook Pro T 6 G Y & 7 H Submit Answer X 8 U 9
Investment Center Income Cameras Phones Computers $ 6,300,000 2,613,000 1,150,000 Average Assets $ 23,000,000 20,100,000 14,600,000 QS 22-12 (Algo) Computing return on investment LO A1 Compute return on investment for each investment center. Which center performed the best based on return on investment? Complete this question by entering your answers in the tabs below. Return on Performance Investment Based on ROI Compute return on investment for each investment center. Note: Round your final answer to 1 decimal place. Investment Center Cameras Phones Computers Income Average Assets Return on Investment $ 6,300,000 $ 23,000,000 % 2,613,000 20,100,000 % 1,150,000 14,600,000 %
Case 1: ROI You are comparing the performance of two (2) separate divisions, segments A and B, using ROI Analysis. A в P100,000.00 P500,000.00 30,000.00 Sales Operating Expenses 300,000.00 Net Operating income 70,000.00 200,000.00 Average Operating Assets 10,000.00 40,000.00 Required: Using ROI Analysis, which segment is performing better? To answer this question, you need to: 1. Compute the ROi of each segment and 2. Compute the components of ROI of each segment