Exam 12: Segment Reporting, Decentralization, and the Balanced Scorecard

Data for September for Mossman Corporation and its two major business segments, North and South, appear below: In addition, common fixed expenses totaled $319,000 and were allocated as follows: $160,000 to the North business segment and $159,000 to the South business segment. -A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:

The Consumer Products Division of Garafalo Corporation had average operating assets of $300,000 and net operating income of $46,900 in March. The minimum required rate of return for performance evaluation purposes is 16%. -What was the Consumer Products Division's residual income in March?

In January, the Universal Solutions Division of Zima Corporation had average operating assets of $520,000 and net operating income of $97,600. The company uses residual income, with a minimum required rate of return of 18%, to evaluate the performance of its divisions. What was the Universal Solutions Division's residual income in January?

Ahina Industries is a division of a major corporation. Data concerning the most recent year appears below: -The division's return on investment (ROI) is closest to:

Beak Industries is a division of a major corporation. Last year the division had total sales of $10,600,000, net operating income of $1,070,600, and average operating assets of $4,000,000. -The division's turnover is closest to:

Ceder Products is a division of a major corporation. Last year the division had total sales of $21,520,000, net operating income of $538,000, and average operating assets of $8,000,000. The company's minimum required rate of return is 18%. -The division's margin is closest to:

Ieso Company has two stores: J and K. During November, Ieso Company reported a net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was $100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales. Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K. -Sales in Store J totaled:

Anspach Corporation has two divisions: the Governmental Products Division and the Consumer Products Division. The Governmental Products Division's divisional segment margin is $11,800 and the Consumer Products Division's divisional segment margin is $155,500. The total amount of common fixed expenses not traceable to the individual divisions is $142,200. What is the company's net operating income?

Kulp Corporation has two major business segments-East and West. In July, the East business segment had sales revenues of $900,000, variable expenses of $441,000, and traceable fixed expenses of $171,000. During the same month, the West business segment had sales revenues of $450,000, variable expenses of $234,000, and traceable fixed expenses of $45,000. The common fixed expenses totaled $321,000 and were allocated as follows: $180,000 to the East business segment and $141,000 to the West business segment. -The contribution margin of the West business segment is:

Harstin Corporation has provided the following data: -The turnover for the past year was:

A company had the following results last year: sales, $700,000; return on investment, 28%; and margin, 8%. The average operating assets last year were:

Licuado Juice Company has four product lines; Orange, Tomato, Carrot, and Grape. Shown below is last year's income statement segmented by product line: Net operating income last year for Licuado Company as a whole was $24,800. -If the Carrot product line would have been dropped at the beginning of last year, how would this have changed the net operating income of Licuado Company as a whole?

Otterholt Corporation uses residual income to evaluate the performance of its divisions. The minimum required rate of return for performance evaluation purposes is 16%. The Games Division had average operating assets of $470,000 and net operating income of $72,900 in September. Required: What was the Games Division's residual income in September?

Niesen Corporation has two major business segments-Consumer and Commercial. Data for the segment and for the company for August appear below: In addition, common fixed expenses totaled $282,000 and were allocated as follows: $127,000 to the Consumer business segment and $155,000 to the Commercial business segment. -A properly constructed segmented income statement in a contribution format would show that the segment margin of the Consumer business segment is:

Ahina Industries is a division of a major corporation. Data concerning the most recent year appears below: -The division's margin is closest to:

The following data have been extracted from the year-end reports of two companies - Company X and Company Y: Required: Fill in the missing data on the above table.

Deskin Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required rate of return is 19%. In February, the Commercial Products Division had average operating assets of $780,000 and net operating income of $139,800. What was the Commercial Products Division's residual income in February?

Ceder Products is a division of a major corporation. Last year the division had total sales of $21,520,000, net operating income of $538,000, and average operating assets of $8,000,000. The company's minimum required rate of return is 18%. -The division's turnover is closest to:

Delmar Corporation is considering the use of residual income as a measure of the performance of its divisions. What major disadvantage of this method should the company consider before deciding to institute it?

Given the following data: Return on investment (ROI) would be: