Exam 10: Differential Analysis: the Key to Decision Making

Daab Products is a division of a major corporation. The following data are for the most recent year of operations: The division's residual income is closest to:

For the past year, Allargando Company recorded sales of $500,000 and average operating assets of $250,000. What is the margin that Allargando Company needed to earn in order to achieve an ROI of 12%?

All other things being the same, a decrease in average operating assets will decrease return on investment (ROI).

Brandon Inc., has provided the following data for last year's operations: Brandon's residual income is:

Jolin Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The manufacturing cycle efficiency (MCE) was closest to:

Residual income:

Manufacturing Cycle Efficiency (MCE) is computed as:

Net operating income is defined as:

The Consumer Products Division of Mickolick Corporation had average operating assets of $450,000 and net operating income of $38,700 in August. The minimum required rate of return for performance evaluation purposes is 10%. What was the Consumer Products Division's residual income in August?

A company that is seeking to increase ROI should attempt to decrease:

In September, the Universal Solutions Division of Mcallister Corporation had average operating assets of $120,000 and net operating income of $12,800. The company uses residual income, with a minimum required rate of return of 12%, to evaluate the performance of its divisions. What was the Universal Solutions Division's residual income in September?

Ebsen Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: The manufacturing cycle efficiency (MCE) was closest to:

Margin equals net operating income divided by sales.

Fruchter Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The throughput time was:

Baad Industries is a division of a major corporation. Last year the division had total sales of $20,440,000, net operating income of $1,860,040, and average operating assets of $7,000,000. The division's turnover is closest to:

The Jenkins Division recorded operating data as follows for the past year: For the past year, the margin used in ROI calculations was:

Emerich Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The manufacturing cycle efficiency (MCE) was closest to:

The Jenkins Division recorded operating data as follows for the past year: For the past year, the return on investment was:

Given the following data: The residual income would be:

Throughput time is the amount of time required to process raw materials into completed products.