Exam 11: Segment Reporting,decentralization,and the Balanced Scorecard

The Holmes Division recorded operating data as follows for the past year: -For the past year,the turnover was:

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:

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

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. -Licuado is considering the implementation of a $5,000 advertising program specifically targeted at one of the four product lines.The program is expected to increase sales for any one of the product lines by $12,000.If the goal is to maximize the company's net operating income,for which product line should Licuado implement the advertising program?

All other things the same,if a division's traceable fixed expenses decrease the division's segment margin will increase.

Bonniwell Corporation has two divisions: the Delta Division and the Alpha Division.The Delta Division has sales of $620,000,variable expenses of $359,600,and traceable fixed expenses of $229,200.The Alpha Division has sales of $820,000,variable expenses of $541,200,and traceable fixed expenses of $172,900.The total amount of common fixed expenses not traceable to the individual divisions is $122,000.What is the company's net operating income?

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.

Ferro Wares is a division of a major corporation.The following data are for the latest year of operations: Required: a.What is the division's return on investment (ROI)? b.What is the division's residual 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. -A properly constructed segmented income statement in a contribution format would show that the segment margin of the East business segment is:

Return on investment (ROI) is equal to the margin multiplied by:

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 net operating income of the company as a whole is:

The Axle Division of LaBate Company makes and sells only one product.Annual data on the Axle Division's single product follow: -Suppose the manager of Axle desires a return on investment of 22%.In order to achieve this goal,Axle must sell how many units per year?

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 Legal Department of an organization is not considered a responsibility center because it does not generate revenue.

Denner Company has two divisions,A and B,that reported the following results for October: If common fixed expenses were $31,000,total fixed expenses must have been:

Howe Company increased its ROI from 20% to 25%.Net operating income and sales remained at their previous levels of $40,000 and $1,000,000 respectively.The increase in ROI was attributed to a reduction in operating assets brought about by the sale of obsolete inventory at cost (the proceeds from the sale were used to reduce bank loans).By how much was inventory reduced?

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

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:

The following information is available on Company A: -Company A's residual income is:

Gebru Industries is a division of a major corporation.Last year the division had total sales of $12,450,000,net operating income of $1,357,050,and average operating assets of $3,000,000.The company's minimum required rate of return is 10%. Required: a.What is the division's margin? b.What is the division's turnover? c.What is the division's return on investment (ROI)?