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3 years ago

A food manufacturer reports the following for two of its divisions for a recent year.

Business

1 answer:

Mashutka [201]3 years ago

8 0

Answer:

a. Return on Investment

ROI= Operating income/Average invested assets

Beverage Division ROI = 358 / (2,680+2,602) /2

= 358 / 2,641

= 0.13555

= 13.56%

Cheese Division ROI = 643 / (4,473 + 4,409)/2

= 643 / 4,441

= 0.14478

= 14.48%

b. Profit margin

Profit Margin= Operating income / Sales

Beverage Division = 358 / 2690

= 0.13309

=13.31%

Cheese Division = 643 / 3934

= 0.16345

= 16.35%

c. Investment turnover for the year

Investment turnover = Sales / Average invested assets

Beverage Division = 2690 / 2641 = 1.02

Cheese Division = 3934 / 4441 = 0.89

d. Beverage$'m Cheese'million

Average Assets 2641 4441

Targeted return 8% 8%

Target income 211 355

Residual Income Beverage'm Cheese'm

Operating income 358 643

Less: Target income 211 355

Residual Income 147 288

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4 years ago

Jamison Company reports depreciation expense of $48,000 for Year 2. Also, equipment costing $164,000 was sold for a $5,800 gain

V125BC [204]

Answer:

The correct answer is (a) $41,800.

Explanation:

Solution:

Given that:

The first step taken is to calculate for depreciation on sold equipment:

Amount($)

Accumulated depreciation in Year -1 (a) = 540000

Depreciation for the year 2 (b) = 48000

Accumulated depreciation to be in year 2 c=(a+b)=588000

Reported accumulated depreciation in year 2(d)=460000

Thus,

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Now,

The second step is to calculate sale proceeds:

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3 years ago