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Lilit [14]
3 years ago
7

Since the Troy Division also sustained an operating loss in the prior year, Rice's president is considering the elimination of t

his division. Troy Division's traceable fixed costs could be avoided if the division were eliminated. The total common corporate costs would be unaffected by the decision. If the Troy Division had been eliminated at the beginning of last year, Rice Corporation's operating income for last year would have been:
Business
1 answer:
s2008m [1.1K]3 years ago
7 0

Answer:

c. $30,000 lower

Explanation:

Missing word <em>"Rice Corporation currently operates two divisions which had operating results last year as follows: </em>

<em>West Division Troy Division </em>

<em>Sales $600,000 $300,000 </em>

<em>Variable costs 310,000 200,000 </em>

<em>Contribution margin 290,000 100,000 </em>

<em>Traceable fixed costs 110,000 70,000 </em>

<em>Allocated common corporate costs 90,000 45,000 </em>

<em>Net operating income (loss) $ 90,000 ($15,000)</em>

<em>Options are: a. $15,000 higher, b. $45,000 lower, c. $30,000 lower, d. $60,000 higher"</em>

Particulars                                         Amount

Contribution margin                          $100,000

Less: Traceable fixed costs              <u>$70,000</u>

Segment margin of Troy Division   <u>$30,000</u>

The operating income would been $30,000 less without the segment margin contributed by the Troy Division. Hence, If the Troy Division had been eliminated at the beginning of last year, Rice Corporation's operating income for last year would have been $30,000 lower.

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Consider the following hypothetical transactions of the Balance of Payments of Country A: 1. Country A's firms export to Country
serious [3.7K]

Answer:

The net contribution to the Current Account Balance of Country A is $50

Explanation:

The credit entries include those entries which bring the money into the economy whereas the debit entries are those entries in which the expenses are more incurred or we can say more outflow of cash is there.

The debit and credit entries are shown below:

Debit entries:

1.  Country A's firms import from Country C $500 worth of steel

2. Country A's residents buy Country C's government bonds for $1000

3.  Country A's residents pay $100 in dividends on Country C's investments in Country A

Credit entries:

1. Country A's firms export to Country B $100 worth of grain

2. Country A's workers resident in Country B receive $500 in wages

3. Country A's residents receive $50 in interest from Country C's bonds they owned

4. Country A's central bank acquires $1000 worth of Country C's currency

Now the net contribution of the current account balance would be

= Total credit balance - total debit balance

= $100 + $500 + 50 + $1,000 - $500 - $1,000 - $100

= $50

The negative amount represents debit balance whereas the positive amount reflect a credit balance

5 0
3 years ago
Division ABC has $750,000 invested in assets and earned $200,000 in income. Division XYZ has $800,000 invested in assets and ear
Rus_ich [418]

Answer:

Division XYZ has the highest residual income

Explanation:

Residual income is the excess of the controllable profit over the opportunity cost of capital invested.

It is used to appraise and evaluate the performance of separate divisions of the same company where different managers are responsible for each

It is computed as follows:

Residual income = Controllable profit - (cost of capital× operating assets)

<em>Division ABC</em>

Residual income = 200,000 - (10%×750,000) = $125,000

Residual income= $125,000

<em />

<em>Division XYZ</em>

Residual income = 210,000 - (10% ×800,000) = $130 ,000

Residual income= $130,000

Division XYZ has a higher residual income of $130,000 compared to the $125,000 of division ABC. A difference of $5,000 higher.

4 0
2 years ago
Jose wanted to make a graph to show his budget for the month. what type of graph would be the most appropriate to graph for jose
Andru [333]
D. Circle (Pie) graph
3 0
2 years ago
Read 2 more answers
According to the United Nations' stages of economic development for classifying countries with respect to levels of industrializ
andrezito [222]

Answer:

More-deceloped country

Explanation:

Industrialized countries with high per capita incomes, such as Canada, England, France, Germany, Japan, and the United States fall into the category of more-developed country

4 0
3 years ago
On January 15, Cheyenne Corp. sells merchandise on account to Flounder Associates for $4500 with terms 2/10, n/30. On January 20
Leni [432]

Answer:

The amount of cash received on January 24 is $3332

Explanation:

The amount of cash received will be for the net amount of receivable after adjusting for sales returns and the sales discount as the payment is received within the discount period of 10 days as stated by the term 2/10 which means a 2% discount if payment is received within 10 days of sale.

The accounts receivable at January 15 after sale were $4500. Out of this amount, $1100 of returns are made. Thus, the remaining balance of accounts receivables after return is $4500 - $1100 = $3400

The discount received will be = 3400 * 2% =  $68

Thus, the cash received on January 24 will be 3400 - 68  =  $3332

6 0
3 years ago
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