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

Return on investment (ROI) may not be fully controllable by a manager because of committed costs.

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 net operating income of the company as a whole is:

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 net operating income of the company as a whole is:

Deano Products is a division of a major corporation.The following data are for the last year of operations: -The division's margin 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 residual income is closest to:

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?

The Casket Division of Roybal Corporation had average operating assets of $750,000 and net operating income of $86,700 in March.The company uses residual income to evaluate the performance of its divisions,with a minimum required rate of return of 13%. Required: What was the Casket Division's residual income in March?

Higado Confectionery Corporation has a number of store locations throughout North America.In income statements segmented by store,which of the following would be considered a common fixed cost?

The following information relates to the Cranberry Division of Innovative Bologna Corporation for last year: -Assume that Cranberry was being evaluated solely on the basis of return on investment (ROI).Which of the following investment opportunities would Cranberry want to invest in?

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:

Forth Corporation has two major business segments-Retail and Wholesale.In March,the Retail business segment had sales revenues of $500,000,variable expenses of $245,000,and traceable fixed expenses of $90,000.During the same month,the Wholesale business segment had sales revenues of $240,000,variable expenses of $101,000,and traceable fixed expenses of $38,000.Common fixed expenses totaled $152,000 and were allocated as follows: $79,000 to the Retail business segment and $73,000 to the Wholesale business segment. Required: Prepare a segmented income statement in the contribution format for the company.Omit percentages;show only dollar amounts.

Deano Products is a division of a major corporation.The following data are for the last year of operations: -The division's turnover is closest to:

An investment center is any responsibility center in an organization that controls cost and revenues and invested funds.

Which of the following will not result in an increase in return on investment (ROI),assuming other factors remain the same?

Heaslet Fabrication is a division of a major corporation.Last year the division had total sales of $36,640,000,net operating income of $1,795,360,and average operating assets of $8,000,000.The company's minimum required rate of return is 12%. Required: What is the division's return on investment (ROI)?

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:

Largo Company recorded for the past year sales of $750,000 and average operating assets of $375,000.What is the margin that Largo Company needed to earn in order to achieve an ROI of 15%?

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

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:

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. -The segment margin ratio in Store J was: