Please see complete question below :
CPA-08299: Managers of the Doggie Food Co. want to add a bonus component to their compensation plan. They are trying to decide between return on investment (ROI) and residual income (RI) as the performance measure they will use. If Doggie adopts the RI performance measure, the relevant required rate of return would be 18%. One segment of Doggie is the Good Treats division, where the manager has invested in new equipment. The operating results from this equipment are as follows:
Revenues $ 80,000
Cost of goods sold 45,000
General and administrative expenses 15,000
Assuming that there are no income taxes, what would be the ROI and RI for this equipment that has an average value of $100,000?
ROI RI
Answer:
ROI = 20% and RI = $2000
Explanation:
Return On Investment(ROI) = Profit before Interest & Tax/Average Investment
Profit before Interest & Tax (PBIT) = Revenue -cost of goods sold- General & Adm expenses
PBIT= $ 80,000
- $45,000
-$15,000
= $20,000
ROI = ($20,000/100,000) * 100% = 20%
Residual Income = PBIT - (Average Investment* Required Rate of Return)
=$20,000- (18%* 100,000)
=$20,000- $18,000
= $2000
Answer:
Corporate Social Responsibility
Explanation:
The corporate social responsibility are set of guidelines for the company to operate ethically and bring value for the better future of people, animals, plants and marine life. These guidelines brings forward the concept of sustainability, which says that the companies and businesses must not compromise the needs of future generation by satisfying the needs of current generation. So this means corporate social responsibility is the duty of care to future and current generations.
Answer:
$3,400
Explanation:
Out of five day workweek, accounting period ends on Thursday which indicates that employees work only for 4 days. Therefore, salaries are earned only for 4 working days and unpaid at the end of the accounting period
Salaries earned but unpaid= 4 working days * $850 per day = $3,400
Hence, salaries earned but unpaid at the end of the account period is $3,400
Answer: The contingency approach
Explanation:
The contingency approach is one of the type of management theory that helps in understanding the various types of principles in an organization and it is also refers as the situational approach.
The main objective of the contingency approach is that it provide manager the different types of ways to give reaction on the given issue and different types of situation.
According to the question, the contingency approach helps in providing the different types of effective ideas to the manager where they facing different types of problems in an organization.
Therefore, contingency approach is the correct answer.
