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

Wryski Corporation had net operating income of $150,000 and average operating assets of $500,000.The company requires a return on investment of 19%. Required: a.Calculate the company's current return on investment and residual income. b.The company is investigating an investment of $400,000 in project that will generate annual net operating income of $78,000.What is the return on investment of the project? What is the residual income of the project? Should the company invest in this project?

The concept of economic value added (EVA) is most similar 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:

A segment of a business responsible for both revenues and expenses would be called:

Data for December concerning Dinnocenzo Corporation's two major business segments-Fibers and Feedstocks-appear below: Common fixed expenses totaled $314,000 and were allocated as follows: $129,000 to the Fibers business segment and $185,000 to the Feedstocks business segment. Required: Prepare a segmented income statement in the contribution format for the company.Omit percentages;show only dollar amounts.

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 margin is closest to:

Idso Industries is a division of a major corporation.The following data are for the latest year of operations: Required: What is the division's residual income?

Last year the House of Orange had sales of $826,650,net operating income of $81,000,and operating assets of $84,000 at the beginning of the year and $90,000 at the end of the year.What was the company's turnover rounded to the nearest tenth?

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 minimum required return in March?

When used in return on investment (ROI) calculations,operating assets include investments in land held for future use and investments in other companies.

A decentralized organization is one in which decisions are made by top management and then implemented by managers at lower operating levels.

Eber 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 margin? b.What is the division's turnover? c.What is the division's return on investment (ROI)? d.What is the division's residual income?

Verkamp Corporation has two divisions: the YDI Division and the QCC Division.The corporation's net operating income is $31,800.The YDI Division's divisional segment margin is $111,800 and the QCC Division's divisional segment margin is $152,800.What is the amount of the common fixed expense not traceable to the individual divisions?

Kaighn Corporation has two divisions: the West Division and the East Division.The corporation's net operating income is $18,500.The West Division's divisional segment margin is $27,700 and the East Division's divisional segment margin is $49,400.What is the amount of the common fixed expense not traceable to the individual divisions?

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?

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: