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rewona [7]
3 years ago
12

Our company reported the following financial numbers for one of its divisions for the year; average total assets of $4,100,000;

sales of $4,525,000; cost of goods sold of $2,550,000; and operating expenses of $1,372,000. Assume a target income of 10% of average invested assets. Compute residual income for the division:
Business
1 answer:
mestny [16]3 years ago
7 0

Answer: $193,000

Explanation:

Given that,

Average total assets = $4,100,000

Sales = $4,525,000

Cost of goods sold = $2,550,000

Operating expenses = $1,372,000

Target income = 10% of average invested assets

Net operating income = Sales - Cost of goods sold - Operating expenses

                                     = $4,525,000 - $2,550,000 - $1,372,000

                                     = $603,000

Minimum required return on assets = 10%

Residual income:

= Net operating income - (Minimum required return on assets × Average total assets)

= $603,000 - (10% × $4,100,000)

= $193,000

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Answer:

the bad debt expense is $900

Explanation:

The computation of the bad debt expense is shown below:

bad debt expense is

= Written off amount + estimated uncollectible amount at the year end

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We simply added the above two items so that the amount of the bad debts for the first year could come

Hence, the bad debt expense is $900

7 0
3 years ago
Open-end mutual funds are the most common type of investment company. Which of the following statements characterize these funds
victus00 [196]

Answer:

The  statements that characterizes these funds is:

a. Fairly liquid investments.

b. Issue new shares in response to increased demand.

c. Increase diversification but do not reduce nonsystematic risk.

Explanation:

a) Fairly Liquid Invetsment: TRUE, as on the basis of demand the fund issuer can repurchase or reissue extra securities at any time so as to ensure proper liquidity to the investment.

b) Issue New Share for Increase Demand: TRUE, issuer can increase and decrease the no. of securities for trading as the demand for the same increases.

c) Increase diversification but not reduce unsystematic risk: TRUE. As Mutual Funds generally increase diversification of funds by investing in various sectors to minimize the systematic risk of the market but it cannot control the unsystematic risk of the market.

d) Require Minimum Purchase of 3000: FALSE. As the Minimum investment for the mutual funds starts from 250 or 1000 and not 3000.

e) Charges High Fees for Professional Managment: FALSE, As most of the open-ended mutual fund just charges 0.85% or low of the Investment Amount as total Expenditure for providing services, which is not so high as compared to returns provided by them.

Therefore, The  statements that characterizes these funds is:

a. Fairly liquid investments.

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c. Increase diversification but do not reduce nonsystematic risk.

3 0
3 years ago
The High Towers Center is a 300-room hotel that was built ten years ago for a total project cost of $24,000,000. The market valu
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= $24,000 ÷ 300

= $80

Therefore for computing the room price of room rent we simply divide the number of rooms by return required.

7 0
3 years ago
Marin Products produces three products — DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off
sattari [20]

Answer:

  MARIN PRODUCTS

Selling after further processing

                                           DBB-1             DBB-2                 DBB-3

unit                                      16,000         24,000                36,000

Sales revenue after

processing                        $1,040,000    $1,200,000       $2,700,000

Joint Cost                          (757,895)          (1,136,842)        (1,705,263)

Separate processing cost  <u>(110,000)  </u>       <u>(44,000) </u>          <u> (66,000)</u>

Net Income                         <u> 172,105    </u>      <u> 10,158        </u>      <u>  928,737</u>

selling at slipt off point

                                           DBB-1             DBB-2                 DBB-3

unit                                      16,000         24,000                36,000

Sales revenue                  $400,000        840,000           1,980,000

Joint Cost                        <u>  (757,895) </u>        <u> (1,136,842)   </u>     <u>(1,705,263)</u>

Net Income                         <u> (357,895)    </u>      <u> (296,842)        </u>    <u> 274,737</u>

Decision : All products should be processed further in order to increase the profit of the company

Allocation of Joint Cost

Cost per unit = $3,600,000/76,000=  $47.37

DBB-1 =   $47.37*16,000 = $757,895

DBB-2 = $47.37*24,000 = $1,136,842

DBB-3 = $47.37*36,000 = $1,705,263

Explanation:

8 0
3 years ago
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Vanyuwa [196]

Answer:

D) normative control

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In this case, Curtis pays a lot of attention to how his employees treat their customers and trains them to do it a certain way that he considers to be effective.

4 0
3 years ago
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